Friday, April 03, 2020

Private sector sees better second half

Jun 03. 2015
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By Erich Parpart

The Nation

The economy has nowhere else to go but up after hitting bottom in the first quarter, while there are signs that exports and domestic consumption are picking up, the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) said yesterday.

"The slowdown of the economy has passed the lowest point, and we maintain that its expansion will be better in the second half of the year," said Boontuck Wungcharoen, current chairman of the JSCCIB and chairman of the Thai Bankers’ Association (TBA), one of the committee’s member organisations.

Overall export volume increased in April and shipments to China also grew for the first time this year, both of which are good signs for the export sector. The number of tourists has maintained its momentum and the tourism sector should be able to continue to help the economy during the second half, he said.

April’s exports to China expanded by 1.1 per cent from the same period last year. Both industrial and overall business confidence for the next three months has improved thanks to the recent consecutive cuts in the policy interest rate, which helped lower financing costs. Meanwhile the government’s disbursement of its investment budget – at 33 per cent of the Bt450-billion budget in fiscal 2015 as of end-April – is satisfactory and should continue to help support the economy during the period, he said.

The JSCCIB has also urged the Revenue Department to help small and medium-sized enterprises by simplifying the tax-payment system via lowering corporate income tax.

The suggestion is to reduce it to 5 per cent for SMEs whose annual net income is not higher than Bt50 million, to 10 per cent for those generating between Bt50 million and Bt100 million, and to 15 per cent for those bringing in a higher amount, but no more than Bt200 million.

Greater access to finance

Corporate income tax is currently set at 20 per cent.

"The introduction of this tax measure would help the government expand its tax base of business operators and improve the quality of SMEs’ accounts, which would provide them with greater access to finance," said Thai Chamber of Commerce (TCC) chairman Isara Vongkusolkit.

Nevertheless, the issue of the payment of back taxes is still under discussion, as SMEs do not or cannot pay them, and this is currently hampering the process of introducing a simplification of the taxes that are being collected from SMEs, he said.

Meanwhile, the JSCCIB has compiled four recommendations aimed at increasing the country’s competitiveness, which will be proposed to the government at the next meeting of the Joint Public Private Partnership Committee as ways to help improve the economy.

The JSCCIB, which comprises the TCC, the Federation of Thai Industries (FTI) and the TBA, represents the private sector at meetings of the joint panel.

The first measure is to set up a Technological Institute for Sustainability and Trade department under the Science and Technology Ministry, to promote the development and production of green products and increase the country’s export competitiveness.

The second proposal is for the government to allow for the expansion of two border checkpoints in Nan (at Huai Kon) and Uttaradit (at Phu Du) to increase trade activities along the border with Laos.

"The expansion of the two border checkpoints would include the cutting down of protected forest, which requires government approval, but the expected return from the investment is believed to be greater because the forest areas near the two borders are already deteriorated," said FTI chairman Supant Mongkolsuthree.

The third measure is for the Metropolitan Waterworks Authority to extend the provision of water service to Pathum Thani, Nakhon Pathom, Samut Sakhon and Chachoengsao, thus reducing firms’ production costs in the Bangkok metropolitan area.

The final private-sector proposal is for the Excise Department to cancel the excise duty on air-conditioners used in automobiles, in order to enhance the sector’s competitiveness.

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