Thai finance minister Arkhom Termpittayapaisith on April 11 said that his ministry will end three decades of waiver and start collecting financial transaction tax on sales of stocks.
Arkhom said the timing was right for the ministry to end the tax waiver because the stock market has expanded a lot and growth has continued even during the Covid-19 crisis.
He said the tax will be sales tax like in foreign stock markets and stock sellers will have to pay at the rate of 0.1 per cent on a monthly basis.
He said stock brokers will have to report monthly sales to the Revenue Department for tax evaluation.
The Ministry of Finance expects to receive over 10 billion baht ($300 million) from stock sale taxes this year.
Arkhom said his ministry did not have to make new regulations for collecting the stock sales tax because the ministry has already had a law whose enforcement had been suspended.
“In the past, we waived the tax to support the market’s growth,” Arkhom said.
“Now, the market is growing while the government is still shouldering the tax burden for the stock traders. The support must have a time limit. It’s like we supported the auto industry. After the industry enjoyed growth, the manufacturers had to start paying corporate taxes.”
Arkhom said the ministry will inform the Stock Exchange of Thailand (SET) in advance before it would start collecting the tax.
He said the ministry has been consulting with the SET, brokers and the Federation of Thai Capital Market Organisations about the tax collection all along.
“At first, the market did not agree with the idea but later they understood. They realised that it could be worse if we collected capital gains taxes,” Arkhom said.
He added that there would be no problem in meeting the revenue target and the ministry expected to receive five per cent more revenue from state enterprises.
THE NATION (THAILAND)/ASIA NEWS NETWORK