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Thailand: Bankers prepare to aid VAT refund policy
The Thai Bankers’ Association stands ready to discuss cutting debit card issuance fees as requested by Finance Minister Apisak Tantivorawong, to add to the government’s proposed value-added tax (VAT) refunds during next year’s Chinese New Year.
The association’s members have yet to discuss the issue, but it stands ready to invite all 15 bank members to talks, given the differences in financial products, particularly savings accounts linked with debit cards, said chairman Predee Daochai. The group wants to prevent impacts to business planning and income.
Banks will not deny any requests that benefit the country if they can accommodate them, he said.
The Finance Ministry plans to offer a VAT refund to shoppers who spend up to 20,000 baht from Feb 1 to 15 next year in a bid to boost domestic spending amid murky economic prospects.
Only spending on debit cards with savings accounts linked to PromptPay will qualify for the VAT refund. Qualified shoppers will be eligible for a 5% VAT refund for every purchase of products and services imposed VAT, while the remaining 2% VAT will go to the government’s coffers.
With a 20,000-baht maximum and a 5% VAT refund, shoppers will be eligible for a 1,000-baht return.
Mr Predee, who is also Kasikornbank (KBank) president, said that the bank offers payments for Thai e-visa services to foreign tourists through QR codes and internet banking.
Under the service, which is scheduled to be available from early next year, foreign tourists can use 126 currencies to pay for visa-on-arrival.
The Foreign Affairs Ministry yesterday unveiled the e-visa service, enabling foreigners to apply, submit required documents and pay for the visa-on-arrival online.
Thai e-visa will be offered at the Thai Consulate-General in Beijing on Feb 15, 2019 before being extended to other Chinese cities on March 1, and the UK and France on April 1.
The service is expected to be available at all Thai embassies and consulate-generals worldwide within three years.
In related news, Mr Predee said KBank’s 2018 lending growth at 5-7% is expected to be achievable as loans always grow at a strong pace in the final quarter.
The country’s third-largest bank plans to set aside loan-loss provisions, as is normal practice during the fourth quarter to raise the coverage ratio to up to 200%.
The bank targets non-performing loan coverage ratio to be no more than 165%, he said. The planned lower coverage ratio is in line with improving asset quality and KBank’s plan to manage bad loans internally.
For loan growth next year, KBank aimed for a 5-7% expansion with a focus on retail loans, including mortgage, auto and credit card loans, though the Bank of Thailand’s tightening housing loan will be come into effect from April 1, 2019, Mr Predee said.
Commenting on the upward policy rate trend, he said that it is necessary for KBank to follow suit if the market rate is raised.
Even though the central bank kept the policy rate unchanged at last month’s meeting, a narrower vote of 4-3 made it likely the first rate hike in more than seven years at the final meeting this meeting.
Source: https://www.bangkokpost.com/business/finance/1587142/bankers-prepare-to-aid-vat-refund-policy