Thai gold traders to oppose possible tax in talks with Finance Ministry

Thailand’s Gold Traders Association plans to oppose a possible gold tax when it meets the Finance Ministry next week or by late August, while seeking government support for US dollar-denominated trading and the country’s ambition to become a regional gold hub.

Dr Kritcharat Hiranyasiri, chairman of MTS Gold Co Ltd, said the association was preparing to meet Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas following discussions with the Bank of Thailand during the previous week.

The meeting will cover the industry’s objection to the taxation proposal, the economic role of gold trading and measures that could strengthen Thailand’s competitiveness in the regional market.

Association warns tax could hurt gold industry

Kritcharat said the association would explain why it believed a gold tax should not be introduced, arguing that such a measure could have consequences for the domestic industry.

It also wants the government to recognise the role of gold trading in generating financial flows within the economy. The association argues that activity in the gold market also contributes to the strength of the baht.

Dollar trading and gold-hub ambitions on agenda

The association will ask the government to support infrastructure that would make it easier for the public to buy and sell gold in US dollars.

It is also seeking clearer policy support to help Thailand compete with established regional gold-trading centres such as Singapore and Hong Kong.

The association believes stronger market infrastructure and greater regional competitiveness could support Thailand’s development as a gold hub and contribute to the country’s gross domestic product.

BOT raises concerns over large cash volumes

The planned Finance Ministry meeting follows discussions between the association and the Bank of Thailand during the previous week.

According to Kritcharat, the central bank expressed concern about the high volume of cash used in some gold transactions and wanted stricter scrutiny of such activity.

The association is concerned that tighter controls could affect major customers and encourage some investors to transfer their gold-trading activity to overseas markets.

The Finance Ministry talks are expected to address both the possible tax and the industry’s requests for regulatory and infrastructure support.