Thailand Increases Bank Tax

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

16 February 2012

From July 31, 2012, all banks in Thailand will have to pay an increased levy to help fund the public debt that arose out of financing their rescue during the 1997 Asian financial crisis.

In order that the government will be able to borrow additional debt to finance infrastructural projects after the recent floods, the THB1.14 trillion (USD36.9bn) Financial Institutions Development Fund (FIDF) has been transferred to the Bank of Thailand, the country’s central bank.

At the same time, the present 0.40% levy on bank deposits is to be increased to 0.47%. Out of the new levy, 0.46% will be used service the FIDF, with the remaining 0.01% going to the Thai agency providing bank deposit guarantees.

While the new levy is lower than had been feared, with some expecting a level as high as 0.60%, it will now have to be paid by state-owned banks, as well as by the country’s private commercial banks. Previously, the former were exempt from payment.

Additionally, the Bank of Thailand is to examine whether the current THB1m guarantee limit on bank deposits should be increased.

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