‘Fateco’ sends a letter to the ‘Treasury Minister’ opposing stock tax Pointing to drag Thai stocks to lose more
on May 5 Paiboon Nalinthrangkun, Chairman of the Board of Directors of the Federation of Thai Capital Market Organizations (FETCO) revealed that in the morning of May 5th, Fateco had sent a sealed letter to Mr. Magic Fill Pittayapaisith Minister of Finance In order to show his position and opinion on the levy of stock sales tax, only 0.1% of the selling value from the first baht in the Stock Exchange of Thailand (SET) who disagrees with the measure Because the impact that occurs will affect a chain.
especially the value of securities that have a chance to decline This time, a written opinion has been sent. If the treasury wants to discuss anything further Will be happy to enter the information again. Because in the past, he has talked and provided information for 2 rounds. If the Treasury confirms that it will actually collect sales tax As a matter of practice, one would have to reevaluate the situation after that. But hopefully the treasury will reconsider the idea.
Mr. Paiboon said that the details submitted to the Ministry of Finance consisted of 5 issues: Because it will severely affect the liquidity of the market. It is a burden and affects trading. including impairment of securities held by shareholders In particular, more than 2 million retail investors directly invest and 17 million indirect investments through mutual funds and welfare funds. including institutional investors and foreign investors By studying abroad, it was found that Such tax collection will result in people having to save an additional 2-3 years in order to have enough money in retirement.
2. The increased tax burden will be an additional cost for Market Markers (MM) to develop new capital market products. that affect the development of innovation and the competitiveness of the Thai capital market in the world stage
3. Stock exchanges in developed countries if taxation prefer to give exemptions to MM groups such as Hong Kong, England, France, Italy, Spain and mutual funds, pension funds, welfare funds to reduce the impact on public investment savings and innovative development of the domestic stock market In the case of Thailand, both groups of investors trade together 12-17% of the total selling value in the market. (7% domestic institutions and MM 5-10%) make further tax exemptions worthwhile. If comparing the said tax money with the broad benefits to the people and the development of the Thai stock market’s potential in the long run
4. The 0.1% specific business tax rate was established since 1991 when the commission rate was at 0.5%. abroad with more Trading percentage As a result, the value of tax levied at the 0.1% tax rate, plus 0.01% of local tax to 0.11%, is 0.7 times the current value of the transaction fee charged. Significantly affect the trading decision.
especially in a situation where global capital markets are highly volatile due to the COVID-19 situation. War between Russia and Ukraine Including the increase in the policy interest rate of the US Federal Reserve (Fed), resulting in stock indexes around the world. exchange rate and international capital flows very volatile Such tax imposition would reinforce that volatility.
and 5. Higher cost of capital when market liquidity decreases. As a result, listed companies (Co., Ltd.) slow down or reduce their investment in business expansion, resulting in lower profits, affecting the country’s GDP. The corporate tax that the company can pay will be reduced accordingly. This would have a severe impact on small and medium sized companies (SMEs) who currently have very limited funding options.
