Cabinet to mull second phase of stimulus package for SMEs
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THE CABINET will today consider the second phase of the latest economic stimulus scheme to help small and medium enterprises (SMEs), which includes a cut in the corporate income tax.
The first phase of the Bt136 billion package was approved by the Cabinet last week. It injected Bt60 billion into 59,000 village funds, Bt36 billion into 7,000 tambons and Bt40 billion into speeding up existing and new small government projects.
“The tax measures to help SMEs will not affect the government’s tax collection that much this fiscal year as there are not that many months left before fiscal 2016 starts,” Deputy Prime Minister Somkid Jatusripitak said after a meeting with the Council of Economic Ministers at Government House yesterday.
The SME package of stimulus measures will be divided into two parts. The first part will boost SME liquidity by persuading state financial institutions such as Krungthai Bank and the Government Savings Bank (GSB) to extend more loans to SMEs.
The Thai Credit Guarantee Corporation will guarantee the loans and the Finance Ministry will use tax breaks to lower SMEs’ costs.
The second part will strengthen SMEs. The Commerce and Industry ministries will be in charge of helping SMEs find online market channels and get into the e-commerce business.
Finance Minister Apisak Tantiworawong said the SME package will include the proposal to temporarily lower the corporate income tax from 15 per cent, but he could not disclose by how much, as the ministry will have to “review the details again today”.
“The first part of the measures will help SMEs gain better access to financing and lower production costs via financial measures, while the second part, which consists of tax measures, will help SMEs in crucial industries that have the potential to expand operations in the future,” he said.
Luck Wajananawat, president of the Bank for Agriculture and Agricultural Cooperatives, said BAAC expects to loan out Bt20.5 billion to 20,500 A- and B-grade village funds before the end of next month. The bank is now in charge of 30,000 village funds.
BAAC and GSB were tasked by the Finance Ministry to provide Bt30 billion each in loans to 59,000 village funds in a three-month period. GSB last week confirmed that it could meet the target.
“We are not worried about non-performing loans as the loans are being extended to our A and B village funds, which have an NPL ratio of about 3-4 per cent on average,” he said.
“The bank and the Interior Ministry will work together to help the remaining 18,000 village funds in terms of debt and other financial management before requesting more funds from the provincial Village Fund Committee in the next period,” he added.
Tourism Minister Kobkarn Wattanavrangkul said her ministry will help spread income to local communities by working with the Commerce Ministry to promote OTOP (One Tambon One Product) goods to new markets such as in the Middle East.
It will also join hands with the Information and Communications Technology Ministry to open online markets for SMEs in the tourism industry.
“The online market channel will be a new platform for SMEs in the tourism industry to advertise and promote tourist destinations, and increase bookings at SME hotels via greater access to visitors,” she said.
The ministry will not propose any tax measures to stimulate the tourism industry following the August 17 bombing in the capital, as it believes that current measures are still adequate to support the industry’s growth.
Inbound tourists will be back in numbers by next quarter, she said.
