Economy to veer away from exports
The government will now turn its focus to restructuring the economy to reduce dependence on exports while boosting domestic tourism and other businesses, Deputy premier Somkid Jatusripitak said yesterday.
Somkid also said Thailand is now keen to join the US-led 12-nation Tran-Pacific Partnership (TPP) free-trade agreement that currently excludes Thailand.
Speaking at yesterday’s Post Forum 2015, Somkid said the Finance Ministry is working on ways to lower the personal income tax rates, which are currently higher than the corporate income tax rate.
The highest personal income tax rate is 35 per cent compared to the corporate income tax rate of only 20 per cent.
The rate cut will be implemented after a nationwide e-payment and single business account system are in use.
Somkid said there would be less economic stimulus measures because previous measures are deemed sufficient to support economic growth at this stage.
He said Thailand is interested in applying to be a member country of the TPP because it will help boost trade and foreign investment.
It will take another year or so for the agreement to be ratified by each of the current 12 member countries so Thailand still has some time, he said, adding the country will shortly commence a comprehensive study to examine the pros and cons of this crucial trade and investment agreement, which covers 40 per cent of global trade.
Currently, Singapore, Malaysia and Vietnam are the only three Asean countries, who are also members of the TPP.
As head of the economic team, he said the government now needs to strengthen other foundations of the economy in addition to the export sector – such as the agricultural sector and local tourism.
He urged the Joint Public and Private Committee’s provincial units to play a big role in this transformation with cooperation from all provincial, tambon and village units.
The second strategy is to increase the country’s competitiveness and productivity, innovation and value-added products, which are the main focus of the Industry Ministry, the Board of Investment and the Ministry of Information and Communications Technology.
This will lead to more business start-ups while the government will provide incentives for investors to achieve the goals.
"If we can boost a large number of SMEs and start-ups there will be more jobs and this will be a new base of employment," he said.
The third strategy is to promote "Super Clusters" of new economic drivers in which the Board of Investment will play a key role in shifting the focus from building more manufacturing capacity to boosting competitiveness and productivity in services and other sectors.
Another key strategy is to increase connectivity with neighbouring countries and to turn north-south and east-west linkages into practical economic corridors so that Thailand is a hub for Asean.
Meanwhile, Finance Minister Apisak Tantivorawong revealed that around Bt130 billion is expected to be poured into the economy next year through various mega-infrastructure projects. He added that the ministry will concentrate on expanding the tax base, increase the efficiency of tax collection and the ease of paying taxes along with the introduction of the infrastructure fund to lower the government’s financial burden from all the investment projects.
Apisak said the high personal income tax has affected foreign investors’ decision to invest in the country since some of them would have to bring in expertise from abroad if they were to invest and they would also look at how much their employees would have to pay as personal income tax.
"If the national e-payment and the single business account schemes are fully implemented, I believe the personal income tax could be lowered," he said.
He revealed that the outline for the national e-payment scheme should be completed within a month’s time.
