Thailand: Ministry considers tax on share sales

The Finance Ministry might slap a tax on share sales by individual investors in the Stock Exchange of Thailand (SET) next year to generate additional revenue, says Finance Minister Arkhom Termpittayapaisith.

The financial transaction tax has been on the books for around 30 years, but has always been waived.

Mr Arkhom said the ministry needs to implement this tax to generate revenue after the long-time waiver. But before introducing any tax, the government needs to consider the economic situation, he said.

Thailand’s economy contracted by 6.1% last year, mainly as a result of the impact of the Covid-19 outbreak.

The ministry projects economic expansion of 1% this year before rising to 4% next year.

A ministry source who requested anonymity said the implementation of a financial transaction tax would be part of the tax structure overhaul to ensure sustainable state revenue.

The financial transaction tax of 0.1% on equities sales would apply to investors selling more than 1 million baht.

However, the ministry has yet to finalise whether the limit will be more than 1 million baht per month, or per transaction, the source said.

The source said the financial transaction tax was expected to bring in more than 10 billion baht per year in revenue.

The source said the ministry planned to introduce the tax earlier this year, but put it on hold because of unfavourable economic conditions.

The ministry’s tax reform committee targets beginning collection of the levy next year when the economic climate is more favourable.

The source said the ministry previously wanted to apply the financial transaction tax for all sales transactions, but firms dealing with the bourse argued this would have a chilling effect on the market.

All parties agreed on a tax for transactions worth more than 1 million baht.

The source said the ministry could introduce this tax at any time by launching ministerial regulations to start tax collection, as it is already a law.

The Revenue Department and the SET will have to jointly develop a system to monitor stock trading volume and which investors are subject to tax payment, the source said.

According to the Revenue Department’s law governing this financial transaction tax, stockbrokers acting on their customers’ behalf will deduct the 0.1% amount from the proceeds of equity sales and transfer it to the Revenue Department.

Source: https://www.bangkokpost.com/business/2233299/ministry-considers-tax-on-share-sales