BANGKOK, Jan 8 – The cabinet today approved a mini-package to alleviate the plight of smaller industries which are impacted by the nationwide minimum wage increase to Bt300.
Deputy Prime Minister/Finance Minister Kittiratt Na-Ranong said small- and medium-sized enterprises (SMEs) making profits of less than Bt300,000 a year will be exempt from corporate income tax – lifting the ceiling from Bt150,000, while those making a profit between Bt300,001 and Bt1 million will be subject to a 15 per cent tax. A 20 per cent tax will be levied on businesses with profit above Bt1 million.
He said the scheme will benefit about 210,000 SME operators and cost the government Bt2.8 billion annually.
Another relief measure is the reduction of the business tax by 50 per cent for small scale hotels under the supervision of the Local Administration Organisation for three years.
The tax reduction for provincial hotels will cost the government Bt100 million annually, Mr Kittiratt said, adding that the Comptroller General’s Department and Budget Bureau were instructed by the cabinet to increase the rates for civil servant training to be realistic with the current economic situation.
Trainings and seminars for state officials are mostly conducted at provincial hotels to help spur the economy.
Mr Kittiratt said he believed the government’s measures will boost the country’s economic liquidity and the people’s purchasing power, resulting in more revenue for SMEs.
“That’s why we are confident that the minimum wage increase will definitely not [negatively] affect the economy,” he said.
The finance ministry said the cabinet disagreed with a proposal by business operators to set up a fund to offset their losses from the minimum wage increase, saying it would be a big burden to the state coffers.
A proposal to cut withholding tax from 3 per cent to 2 per cent will need a review for it will impact the government’s budget by at least Bt20 billion, he said.
“We need to study how the decrease (of withholding tax) will benefit SMEs and the advantages to the labour situation before resubmitting the proposal to the cabinet,’’ he said.
The original 11-point measure, approved earlier by the cabinet to help SMEs, will be extended for another year, Mr Kittiratt said. The cabinet’s resolution today is retroactive to January 1 this year.
