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To support the local economy during the
COVID19 and its economic impact on the Thai companies (focusing specially on
small and medium sized enterprises), the Thai Government has approved a
stimulus package on March 10th, 2020 of Financial and fiscal
measures worth US$12.7Billion.
Those relief measures target also travel and tourism companies, which accounts for 12% of the GDP and the most affected sectors). From the reduction of tourism, it is the whole chain that is affected (transportation companies, hotels and other services), threatening significantly the future of other businesses as well as employment levels.
Finance Minister Mr. Uttama Savanaya announced those measures based on the principles of “Timely, Targeted and Temporary as Necessary”. Nevertheless, and quoting Mr Lavaron Sangsnit, a senior finance ministry official: "We are ready to introduce more if necessary,"
This stimulus package, approved by the Thai Cabinet on 10 March 2020, includes the following resolutions;
- Easing the debt repayments and lowering the interest rates for businesses, with banks to provide help to debtors.
- The Withholding taxes for businesses to be reduced from 3.0 per cent to 1.5 per cent. In addition, businesses will be offered 1.5 times tax deductions on their interest rates with three times tax deductions on wage expenses.
- Creation of a 20 Billion Thai Baht fund for business or workers directly affected by the coronavirus outbreak, financed the government
- Exemption of Import Duties for materials regarding making face masks
1) Interest on the loans to be reduced at 2% for a period of 2 years, not over 20 million Baht per customer, for the total amount of 150 billion Baht.
2) The debts from The Government Saving bank as well as the Government Housing Bank would have their interest rate decreased while their principal rate would be adjourned.
3) The Bank of Thailand will ease the rules to grant commercial bank loans.
4) A credit line will be provided by the Social Security Fund at 3% and for a period of 3 years, up to 30 billion Thai Baht.
5) The Withholding tax will reduce from 3% to 1.5%.
6) Over the period from1st April to 31st of December 2020, entrepreneurs whom are participating in a low-interest credit will be able to have a 1.5 times reduction on their expenses interest (only if they have a single bank account).
7) The salary expenses paid by the SMEs from April 2020 to July 2020 would face deduction up to 3 times. Tis rule would be only applicable for the employees whom are covered by the Social Security Fund, that receive wages (with a maximum of 15,000 Thai Baht per person and per month).
8) Easing the VAT refund for domestic entrepreneur within 15 days after filing and submission.
9) Refund of the deposit for electricity consumption.
10) Social Security contribution from by employers and employees to be reduced.
11) State property rental fees would be lowered by the Government agencies.
Although those measures would help, they would definitely not be enough to counter the impact of the coronavirus and the slowest economy growth (2.4%) Thailand faced last year. According to a research center from Kasikorn Bank, Thailand’s economy growth would be around 0.5 % this year, Or, the lowest growth since 2009.
Image : Tourism Authority of Thailand Newsroom