Thailand Proposing 20% Tax Cut For Oil Industry

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

17 September 2003

Plans are afoot in Thailand to cut the corporate income tax levied on foreign oil trading firms from 30% to 10%, government officials announced earlier this week.

The measure is part of the government's plan to transform Thailand into a regional oil trading hub, and the tax cut will bring the country into line with its closest rival, Singapore. Commenting on the proposed tax reduction, which is to be put in place by the end of the year, Thai Energy Minsiter Prommin Lertsuridej told reporters:

"We will be charging the same rate to attract them to Thailand, which offers other advantages. Our better-located geography will lure traders to come to meet demand from buyers like China, Japan, and South Korea here".

According to Forbes, the Thai government last month pledged massive investment in its oil infrastructure, in conjunction with new legislation to boost exports of petroleum, in a bid to lower domestic prices and lessen exposure to widely fluctuating price movements in the oil sector. The majority of the 21 million barrels of oil per day consumed in Asia has to be imported.

Recommended