Some of govt's 'reforms' worry foreign investors: forum hears
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Foreign investors are concerned about many reforms being pursued in Thailand, especially amendments to the Foreign Business Act (FBA) and the excise-tax regime, said a German economic counsellor.
Dr Christine Falken-Grosser, economic and commercial counsellor of the German Embassy in Bangkok, told the “Asean Business Forum” held by the Thailand Management Association yesterday that many reforms had been initiated since May by the government, and some of them needed to be reconsidered.
“Investors will compare [Thailand] with other countries. From this perspective, Thailand needs to reconsider whether its policies are relevant to investments. Because there are certain aspects that make investors think twice,” she said.
Falken-Grosser told The Nation on the sidelines of the conference that the planned change of foreign-ownership rules under the FBA and excise-tax reform were the two major concerns of foreign investors.
She said foreign investors, especially alcoholic-beverage and automotive companies, were worrying about the planned change in how excise tax is calculated, with a “one [formula] for everything” regime to be introduced.
“Predictability is the most important thing for investors,” she said, noting that the new excise system would have dramatic effects on many industries. “The question is how it will affect investments that have already been here.”
The Excise Department has announced a plan to change its tax base across the board to state-recommended retail prices from ex-factory prices, which it claims is an attempt to foster transparency and fairness.
However, Aloke Lohia, group chief executive officer of Indorama Ventures, told the conference that as a long-time investor in Thailand he thought the current military government could maintain stability and take the country into the next phase.
Dr Roger van Hoesel, managing director of Dutch company Food Valley, said the Asean Economic Community would encourage small and large companies to consolidate their operations in Asean, and thus each country in the region must be able to communicate to the rest of the world what it is positioned to be in the trade bloc.
He said Thailand, thanks to its strong agricultural base, could profile itself as a source of food and other agricultural products, which is a promising industry for the future. Nevertheless, the country would need to invest more in such areas as genomics and information technology and look beyond its home and neighbouring markets.
Aswin Techajareonvikul, president of Berli Jucker, said competition would get fiercer because of more willingness of companies to take control a larger part of their supply chain.
“There is a strong tendency for one who owns part of a supply chain to own it all,” he said.
