Gold taxes may drive trade to Singapore, Thai association warns
Thailand’s Gold Traders Association plans to oppose proposed taxes on gold transactions, warning that they could weaken the domestic industry and drive trade to Singapore.
- Thailand's Gold Traders Association is opposing proposed taxes on gold transactions, including import duties and capital gains tax, and is seeking a meeting with the prime minister.
- The association warns that imposing these taxes will damage the domestic industry and drive investors and trading activity to more competitive regional markets, specifically Singapore.
- In contrast to Thailand's proposal, Singapore is actively establishing itself as a gold hub by offering tax incentives and strong government support to attract traders.
- The warning comes as Thailand's gold industry already faces a 50% decline in trading volume due to existing regulations that have also diverted some business to Singapore and Hong Kong.
The Gold Traders Association is seeking a meeting with the prime minister to oppose possible taxes on gold transactions, warning that the measures could damage Thailand’s domestic gold industry and divert business to Singapore.
Dr Kritcharat Hiranyasiri, chairman of MTS Gold Group, confirmed that the association had held several rounds of discussions before submitting a letter to the Prime Minister’s Office requesting a meeting. He expected an appointment to be arranged soon.
“The association is preparing to meet the prime minister to explain its position and raise objections to proposals by the government and several regulatory agencies to impose taxes on gold transactions, including import duties collected by the Customs Department, capital gains tax and taxes on gold-trading activities,” he explained.
Kritcharat warned that introducing such levies would severely damage Thailand’s well-established gold-market ecosystem. Although the country has strong infrastructure supporting gold trading, investors can easily move their transactions to other markets offering greater convenience and lower costs.
He argued that implementing the proposed taxes would undermine the industry and weaken Thailand’s competitiveness relative to regional rivals, particularly Singapore.
Singapore’s rise offers a warning for Thailand
Kritcharat pointed to tighter controls introduced by the Bank of Thailand in 2015, which he claimed had forced several major operators to establish branches in Singapore.
In the years since, Singapore has developed a robust gold-trading system with strong government support. According to Kritcharat, it formally declared itself a gold hub on June 4, with Thai operators playing a major role in supporting the city-state’s gold market.
He added that Singapore’s gold-hub framework was expected to become operational around November. The measures would include tax incentives for companies that establish operations in Singapore and generate high trading volumes.
Thailand, by contrast, is considering imposing additional taxes while competing markets are reducing taxes to attract investment, he argued.
Thai gold-trading volume falls by more than 50%
Apart from concerns over taxation, Thailand’s gold industry is also facing a sharp decline in trading activity.
Kritcharat reported that domestic trading volume had fallen by more than 50% since January, largely because major investors had withdrawn from the market.
About 14 large gold operators were under close supervision by the Bank of Thailand because of anti-money-laundering concerns, he explained.
According to Kritcharat, the restrictions had also brought Thailand’s gold exports to Cambodia to a halt, with transactions shifting instead to Hong Kong and Singapore. Thai operators had become increasingly cautious because of anti-money-laundering regulations.
Although private-sector import and export transactions comply fully with banking procedures, the Bank of Thailand continues to regard gold trading as a factor contributing to volatility in the baht, he noted.
Kritcharat argued that this approach differed from policies adopted by developed economies, which generally encourage trading activity to remain within their domestic markets.
