Relax some rules, OSMEP urges

The office also wants the corporate tax set at a uniform rate of 15 per cent for better alignment with peers in Asean.
Isara Phumas, an adviser to Osmep, told a seminar yesterday that some regulations and laws would have to be amended if Thailand wants to improve SMEs’ competitive edge.
She said 15 per cent was an appropriate tax level and would not hurt government revenue. The board should also expand the definition of an SME to cover those with annual revenue up to Bt100 million, from the present cap of Bt30 million.
Currently the portion of SME net profit up to Bt150,000 is exempted from tax, profit between Bt150,000 and Bt1 million is subject to 15 per cent, and the portion over Bt1 million is subject to 23 per cent.
In Singapore, the first 10,000 Singapore dollars’ (Bt251,000) worth of net profit is levied 4.25-per-cent tax, S$10,000-$290,000 is levied 8.5 per cent, and the portion of net profit exceeding S$300,000 is subject to 17 per cent.
In Indonesia, SMEs with annual revenue of less than 50 billion rupiah (Bt159 million) pay 12.5-per-cent tax, while in Malaysia, companies with registered capital of not over 2.5 million ringgit (Bt25 million) and net profit not over 500,000 ringgit pay 20 per cent.
Isara said some of Thailand’s regulations should be relaxed, especially those governing pitches for state projects, for which SMEs are required to have collateral and sound financial status.
She said the strict conditions on lending to SMEs should also be relaxed to enable them to gain access to more funding. Only 30 per cent of SMEs can conveniently access loans, she said.