Nod for Bt5 bn to prop up SMEs

The ministry expects the measures will help around 100,000 SMEs.

The Finance Ministry earlier introduced a Bt100-billion policy loan programme offering 4-per-cent interest rates and a Bt100-billion guarantee scheme for SME loans along with Bt6 billion worth of state venture-capital funds to increase SMEs’ liquidity. This second round of measures is meant to support that initial effort, Atchaka said.

The Bt5-billion budget includes Bt2.947 billion to strengthen SMEs that are currently operating, which is expected to help 55,338 operators. Another Bt408.47 million will support SMEs’ innovations and new start-ups, benefiting 22,715 operators.

Urgent measures to help SMEs in need of business restructuring will account for Bt630 million, helping 17,000 operators, while Bt1.112 billion allocated to help SMEs with research and development is expected to benefit 2,450, she said.

"The 2016 fiscal budgets from various government agencies will be used to fund the measures to help increase existing SMEs’ competitiveness and the measures to help with their innovations. The funding to help SMEs that are in dire condition will be allocated from the budget of Office of SMEs Promotion."

OSMEP has approved in principle the Bt630-million budget to help SMEs that are in urgent need and is working to gain board approval to increase its 2016 budget by Bt1.837 billion for the measures to increase the competitiveness of 27,463 SMEs, Atchaka added.

Meanwhile, the Cabinet has approved a measure to help rice farmers, especially projects that are involved with the Bank for Agriculture and Agricultural Cooperatives (BAAC), by lowering their interest rate to 3 per cent for an outstanding loan that is no more than Bt80,000 for six months. The government will compensate BAAC for Bt975.57 million.

This measure is aimed at slowing down rice output during the current oversupply period. There is another measure worth Bt12.5 billion for rice-farmer cooperatives and other groups, where the BAAC will charge 3-per-cent interest on loans from October 1, 2015, to September 30, 2016.

Another loan measure worth Bt26.74 billion has also been approved to provide relief following a slowdown in rice sales, especially in the North and Northeast, which will be effective from November 1 to February 28 next year. Farmers who hold off selling their rice can ask for loans of no more than Bt300,000.

The Cabinet has also approved the Finance Ministry’s tax and fee measures to support investments in the real-estate sector via trust funds. There are exemptions of value-added tax, specific business tax and stamp duty for the transfer of assets from a real-estate trust fund along with exemption of personal income tax for holders of the trust fund.

SMEs are being encouraged to register within the tax system with exemptions of corporate income tax for five accounting rounds (no more than Bt5 million per round) for SMEs that secure a commercial registration between October 1, 2015, to the end of December 2016. The target groups are processed agriculture products and research and development along with innovation.

However, the Cabinet has denied the Finance Ministry’s proposal to amend the Local Maintenance Tax Act of 1965. The ministry said it was outdated and too slow in terms of assessing land value, but the Cabinet believes that because of the current slowdown in the economy, this is not a suitable time for the amendment.

After the Cabinet meeting, Prime Minister General Prayut Chan-o-cha urged rubber growers to avoid a demonstration to pressure the government for price subsidies. Smoked rubber sheets are trading below Bt50 per kilogram in the Thai futures market, against the peak of Bt150 in 2011.

He insisted that the government would proceed with the policy to help only those farmers who grow rubber trees on legally held land. A law would also be imposed, whereby a governing body would be established.

Meanwhile the Highways Department has been ordered to study how to boost rubber usage, and the ministries of Agriculture, Interior, Commerce and Industry were ordered to come up with concrete plans. Prayut mentioned the possibility of higher usage of rubber in the construction of sports stadiums.

"This is to boost our rubber strengths. We can’t just pay [people] below the supply chain and let things pile up [without being used]. We need to maximise domestic use," he said.