InfoQuest (August 05, 2019) -- Finance Minister Uttama Savanayana delivered a keynote speech themed on "Direction of Thailand under the New Government" at Bangkok Post Forum 2019. Thailand now is in the midst of rapid changes brought about by domestic and international factors. These include fast technological changes, as well as global consumer behavior and demographic changes. Meanwhile, a coalition government, which brought 19 parties under the one umbrella, was formed after the general election. It is the new government consisting of the largest number of parties in the history, but it will not hinder the governance of the country, the minister said. He added that the parties in the coalition will fine-tune their policies together to drive the country's economy forward to meet the expectations of people, businesses, investors and outsiders. At present, the United States, China, Japan and even neighboring countries are casting eyes on Thailand's future economic direction.
Mr. Uttama said that within three months from now, the ministry will accelerate the following initiatives. First, the ministry will promote investment and enhance national competitiveness. Thailand currently has many investment projects in hand to meet future needs. The Ministry of Finance will thus work with relevant agencies to effectively promote investment and to develop new ways of investment, so as to boost the confidence of the private sector to make joint investment with the government. In addition, the minister is set to expand investment through the Expanding Thailand Future Fund (TFF), making it a channel for Thai investors to increase domestic investment. Currently the ministry is coordinating with relevant agencies to find more suitable projects to put money into.
"Regarding the specific plan of the TFF to set out the second round of financing expansion, it is necessary to first review which project is all set and is suitable to be shored up by the TFF. Then consultation needs to be held with the agencies involved in the project. For example, the Ministry of Finance should discuss with the Ministry of Transport to find which projects being promoted need the fund from the TFF. "We must set a target first, for not until a target is set will the TFF launch the next round of financing", the minister said.
As for when to raise money on the Stock Exchange of Thailand, the ministry has not decided yet. It needs to discuss specific plans and progresses of plans with relevant agencies in advance, to ensure that investors can be kept informed of the specific implementation plan when financing is launched, thus building their confidence.
The second plan of the emergency program is to promote the development of digital financial systems, especially electronic payments. The ministry should strive to promote the system to connect community-level people, the agricultural sector, and agricultural small and medium-sized enterprise (SMEs), aiming to enable them to benefit from the digital financial system. The ultimate goal is to build Thailand into a true digital society. Third, creating well-being for the public is an important task for the Ministry of Finance, and thus it should allocate an appropriate budget and take into account the needs of people in different classes.
Mr. Uttama added that improving the efficiency of the country's tax collection system or reforming the tax structure is also a pressing priority for the government. Thailand spends relatively much on investment, mainly to meet future demand, so it needs to spend tax revenues on various investment projects. To this end, the ministry has commissioned its subdivisions, including the Fiscal Policy Office, the Revenue Department, the Customs Department and the Excise Department, to jointly study and upgrade the tax collection and management system. On the one hand, part of the tax revenue can be used as national investment funds, and on the other hand, it can help maintain national fiscal discipline.
"The preliminary guidelines stipulate that tax collection should create a fair and just environment for people, businesses and investors, and also stress the way to improve the efficiency of tax collection, reduce the burden on taxpayers, and expand the new tax base by taking advantage of technology. With various new businesses emerging, a fair tax system is needed to promote national investment and innovation," said Mr. Uttama.
In addition, Mr. Uttama said the new tax base currently planned to be supplemented is likely to be an energy tax, which will be discussed at the next meeting with ministers from the relevant agencies. However, everything will start from creating a tax equalization mechanism and a fair tax environment for taxpayers.
"It calls for careful deliberation. We will not focus on a single tax reform, but will adjust the tax structure as a whole to see which field needs what kind of measures. With regard to individual income tax, the ministry has ordered its subdivisions to take charge. The specific percentage reduction has not been decided yet. It still needs to be carefully planned, but it will certainly come down, and the research will be completed in three months. As for the added-value tax (VAT), we are not ready to submit the proposal to the Cabinet, for we must first discuss it with relevant departments," the finance minister said.
Source: InfoQuest, by Kasamarporn Kittisamphan / Rachada / Saowalak, translated by Xinhua Silk Road
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