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The government yesterday won House approval to start negotiations with the United States over an intergovernmental agreement on the US’s Foreign Account Tax Compliance Act (FATCA).
The House approved the negotiation framework by a vote of 426 to 20.
The FATCA was enacted in 2010 by Congress to target non-compliance by US taxpayers using foreign accounts.
Aimed at tackling tax evasion, the Act requires foreign financial institutions to report to the Internal Revenue Service information about financial accounts held by US taxpayers, or by foreign entities in which US taxpayers hold a substantial ownership interest.
The US has so far struck intergovernmental agreements with Denmark, Germany, Ireland, Mexico, Norway, Spain, the United Kingdom and Japan.
Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said the law would be executed only on US taxpayers, and the negotiations followed the conclusion by Thai financial institutions that there should be a government-to-government agreement on the matter.
Parliamentary approval would be sought if Thailand needed to revise any law pursuant to the talks, he added.
Democrat MP Kiat Sittheeamorn raised concerns over legal amendments in the future.
 With China had not yet having signed an intergovernmental agreement, Thai officials must be able to explain how Thailand would benefit from this agreement. Alternatively, they should ask if it is possible for the US to strike an agreement with Asean as a whole, he said.
Democrat MP Alongkorn Ponlaboot said that under the FATCA, financial institutions in foreign jurisdictions would work as if they were units under the US Revenue Department.

OPERATORS OPPOSE STRIKE CALL
The Federation of Thai Industries announced yesterday that industrial plant operators opposed the civil-disobedience call.
FTI chairman Payungsak Chartsutipol said that none of the 8,000 of the federation’s factory members would sanction strikes during the November 13-15 period, on the grounds that such industrial action was unreasonable and could affect the fragile economy.
All manufacturers are struggling to reduce costs and increasing capacity to complete New Year orders, he added.
“A three-day strike means a loss of output, and manufacturers may then fail to complete the orders. This could encourage customers to switch to producers in other countries, which will create chain impacts,” he said.
The FTI’s manufacturer members also vowed to pay their taxes, which can be spent by any government in developing the country and driving the economy.
Like the Thai Chamber of Commerce, which also opposes the civil-disobedience call, the FTI said the protests should stop now.
The efforts to pass the amnesty bill have been killed and prolonged protests would dampen investment sentiment.
New orders for Thai goods could also be switched elsewhere if buyers are uncertain of delivery, said the FTI.

NO THREAT TO REFINERS’ RATINGS
Fitch Ratings (Thailand) says that although the recent increase in Thailand’s strategic oil reserve requirement will likely raise debt levels at Thai refiners, the change will have no immediate rating impact on those refiners rated by the agency.
 From November 1, refiners have had to set aside 6 per cent of Thailand’s domestic oil consumption in the country’s strategic oil reserve, compared with 5 per cent previously. The government said the increase was aimed at lowering the risk of oil supply disruptions, because the majority of oil consumed in the Kingdom is imported.
The increase in the strategic reserve requirement would lead to higher working-capital needs, and thus higher debt for the refiners, said Fitch.
In addition, some refiners may have to acquire additional storage capacity, and holding higher stocks will expose the refiners to bigger inventory gains or losses arising from swings in both crude-oil and refined-product prices, said the rating agency.