SUNDAY, February 25, 2024

Thailand shelves tax on stock trading

Thailand shelves tax on stock trading

Thailand has suspended its planned tax on stock trading indefinitely after the Federation of Thai Capital Market Organisations (Fetco) objected to the move.

The Cabinet has sent back the draft on taxing transactions on the Stock Exchange of Thailand (SET) to the Finance Ministry, Finance Minister Arkhom Termpittayapaisit said on Thursday. He said the Cabinet had reconsidered the tax plans after receiving an objection letter from Fetco.

Arkhom said his ministry would now appoint a taskforce to reconsider the draft and make adjustments based on Fetco’s suggestions.

“We cannot tell if the draft will be enacted within the first half of this year [as planned], since it depends on how long the reconsideration process takes,” he said.

In November, the Cabinet approved levying the tax, which had been waived for the past 40 years.

If the tax is levied, SET investors would eventually have to pay 0.11% per share sold.

However, in the first year, they would pay 0.055% per share sold.

The Finance Ministry expects the new tax to generate between 16 billion and 18 billion baht per year for the government.

Fetco previously warned that levying the tax would drive foreign investors away from the SET and reduce liquidity in the market.

Also fuelling postponement of the tax, said analysts, is the looming dissolution of Parliament for a general election tentatively scheduled for May 7. This prevents the government from making major decisions on bills that could affect voter sentiment.