Thai Government Unveils Tax Cuts

by Mary Swire, Tax-News.com, Hong Kong

23 January 2009

The Thai government has given its approval to a host of new tax measures which are aimed at bolstering the country's economy.

The move - which will see the introduction of several new tax measures - is part of the government's recent economic stimulus package, and will focus on reducing taxes within the country's property and corporate sectors.

The new tax measures include:

• A THB300,000 tax allowance for new property purchases in 2009, along with a year-long extension of the current tax allowance of THB100,000 for mortgage interest payments;
• Water and electricity charges of all households will be waived should the consumption of both commodities remain less than 60 units (of water) and 90 units (of electricity) per month;
• Tax deductions for companies hosting seminars in domestic tourist locations;
• Tax privileges given to venture capital funds investing in small and medium-sized enterprises extended by a further 3 years;
• Tax privileges on the restructuring of debts acquired from mergers and acquisitions extended by another year;
• The introduction of government intervention on the prices of the country's 5 main agricultural products - rice, tapioca, rubber, corn and palm.

All measures will be put into effect immediately, and are retroactive from January 1, 2009.

However, it has been estimated that the introduction of such measures will culminate in a loss of around THB10-20bn worth of government tax revenues for each year they are in place.

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