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Corporate tax rate to remain unchanged
Deputy Prime Minister Suchart Jaovisidha has reaffirmed
that the tax collection policy of the Revenue Department should remain
unchanged. But he admitted that rising oil prices would have a slight impact
on profits of private businesses.
Suchart said rising oil prices had affected the costs of
businesses in the private sector, and tax collection could decline. However,
the corporate tax would not be affected due to the country’s economic
expansion in which several research agencies had forecast that Thailand’s
economy would grow between 6.5-7.1% this year.
The government’s efforts in maintaining the diesel oil
price would also help reduce the impact, as inflation would rise no more
than 3% which is appropriate for the country’s current economic situation,
Suchart said. “The tax collection structure of the Revenue Department and
Excise Department should not be changed. Although there are requests that
the government lower the corporate tax, citing that the tax in Thailand is
around 5-7% higher than that of Singapore. But you see, the cost of living
in the island state is about 10% higher than Thailand, and this has
persuaded foreign investors to prefer to invest in the Thai economy”, he
pointed out.
Suchart said the tax collection policy should stay as it
is because global crude oil prices had started declining, and the tax
collection for fiscal 2004 should meet the target. (TNA)
Government joins with private sector in creating Science City
Thailand’s public and private sectors are joining
together in an ambitious project to create a tax-free ‘Science City’ in
a bid to encourage technological innovation and pull in foreign investment.
The move was discussed during recent talks held between Science and
Technology Minister Korn Dabbaransi and senior executives from over 400
production plants from the country’s eastern provinces.
Describing the tax-free ‘Science City’ as a means of
accommodating future technological advancements, Vikrom Kromdit, chief
executive of Amata Corporation Ltd. noted that the new science park is in
accord with the government’s policy of encouraging innovation and boosting
the technological capability of Thai industry.
It is hoped that the Science City will both encourage
technological advancements among companies already based at Amata Nakorn,
and also attract more investment from abroad.
Vikrom said that an increasing number of companies based at the
industrial estate were engaging in research and development, with an eye to
cutting production costs. The ‘cyber free zone’ of the industrial estate
has already been prepared for the creation of the Science City, which will
benefit by its relative proximity to Bangkok’s new Suvarnabhumi Airport. (TNA)
SET ready to end minimum collateral for small accounts
The Stock Exchange of Thailand (SET)’s president
Kittirat Na Ranong voiced support for a proposal by some securities brokers
to scrap a minimum 10% collateral requirement for stock investment
portfolios with credit facility of less than one million baht. He said the
decision on the proposal depended on the Securities Brokers’ Association,
but in his personal view, the matter deserves support. However, he agreed to
back any resolution made by the association. Kittirat said members of the
association must first discuss the matter internally for a final conclusion.
Should the association agree to abide by the proposal,
Kittirat said he was willing to lend support, and would raise the matter for
discussion with the Securities and Exchange Commission (SEC).
The SET chief said he did not think the proposed cancellation of the
minimum 10% collateral requirement would affect investment or increase risk
exposure by securities brokers since the number of investment portfolios
with credit facility of less than one million baht remains small. (TNA)
Thailand invites Philippines to help produce environmental friendly fuel
Prime Minister Thaksin Shinawatra recently invited sugar
cane and palm growers in the Philippines to join his plans to produce
environmental friendly fuel to substitute for imported energy.
Thaksin sought the cooperation through Philippines
President Gloria Macapagal Arroyo whom he met during their bilateral talks
as the two leaders took part in the Third International Conference of Asian
Political Parties (ICAPP), held in the Chinese capital city of Beijing from
September 3-5. The conference aimed at promoting the role of political
parties in development and peace.
The Thai prime minister told President Arroyo that Thailand wanted to
promote palm and sugar plantations in her country in order to produce raw
materials for Thailand’s ethanol industry. Thailand wants to develop
ethanol production in the region in order to reduce its dependency on
imported oil which has become more expensive in recent months. (TNA)
Thai chickens for Russian missiles?
Prime Minister Thaksin Shinawatra has admitted that the
government was considering trading Thai chicken products for Russian military
equipment, especially missiles. He said the government was considering trading
agriculture goods, especially chicken products for Russian hi-tech weapons.
Russia imports more than a million tons of chicken products every year from
other countries. Thailand is one of the world’s top chicken exporters. “The
needs of both countries might be matched,” Thaksin said. The Thai ambassador
in Moscow has been instructed to propose the scheme to the Russian government. (TNA)
Oil Fund set to run
a 55 billion baht deficit
The government’s Oil Fund could run into the red to the
tune of over 55 billion baht by the end of this year as a result of government
measures to subsidize the price of diesel, according to a report published
recently by a leading economic research center.
The Kasikorn Research Center said that its calculations
indicated that the Oil Fund was likely to record a deficit of 55.3 billion baht
by the end of 2004. Previous forecasts had put the deficit between 31.8 billion
baht and 35.8 billion baht. The report attributed the higher than expected
deficit to the continual rise of world oil prices.
At the same time, the research center warned of the
inevitability of consumers having to shoulder some of the burden of the massive
deficit.
Making predictions for oil prices over the coming month, the report said that
the retail price of oil was likely to rise by 10.7 percent to stand at 17.59
baht per liter by the end of the year. This in turn was likely to push up the
rate of inflation to 3.5 percent next year, compared to 2.7 percent in 2004.
This indicated that the government’s subsidization of oil prices did little
more than delay the impact of rising oil costs on inflation and on the economic
situation as a whole. (TNA)
Property business still on the rise
Thailand’s property business continued to grow in the first
half of this year, given a higher register of residences in greater Bangkok and
an increase in total cement sales, according to the Bank of Thailand (BOT).
Nitaya Pibulratanagit, the BOT’s senior director of Internal Audit Group,
disclosed that the central bank’s decision to raise the 14-day repurchase rate
by 25 basis points would not affect the property business.
The BOT believes the property sector will continue to grow, as could be
witnessed by an increase by 12.2% in cement sales to 13.73 million tons in the
first half from that of the same period of the year before. As well, total land
purchase and sale value in the July-August period increased by 40 billion baht
per month, which is close to that of 1996 when the economy enjoyed the highest
growth. The BOT said growth in housing purchases stemmed from real demand by the
public, not from speculation. (TNA)
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