As the world continues its relentless move online, and away from traditional retail, governments are having to find new ways to track and tax online transactions.
The Thai Revenue Department is poised to cast a wider net over online vendors and other businesses that have been evading taxes. The National Legislative Assembly (NLA) is soon to approve amendments to the Revenue Code.
The amendment, which won 139 votes out of the 240-member NLA, will require banks and other financial institutions to report money transfers worth more than 2 million baht per recipient, per year, to tax authorities.
The Nation is reporting that the Deputy Finance Minister Wisut Srisuphan says the amendments will help the Revenue Department collect taxes for goods and services sold online, as sellers have been evading tax payment due to the use of electronic money transfers.
According to the proposed amendments, banks will have to report transfers totalling more than 400 transactions and worth over 2 million baht per year to the Revenue Department so authorities can investigate to see if these vendors paid taxes properly.
The Revenue Department had found it difficult to levy income and other taxes on e-commerce sites and online vendors due to a lack of information.
Most online vendors are individuals with no physical outlets, who sell their products via social and digital platforms. Buyers generally transfer money for the goods via banks’ electronic payment service, so authorities have found it difficult to follow up on tax collection.
According to the Revenue Department’s data, Thailand has 10.7 million citizens aged 30-39, of which 8.2 million are salaried workers, while the rest are self-employed. However, a large number of the self-employed do not pay taxes.
Thailand also has some 640,000 enterprises registered as ‘juristic persons’, of which only about 420,000 have filed tax returns.
But some NLA members are voicing opposition to the amendments, citing potential negative effects on other people, including NLA members, who themselves receive their meeting allowances via bank transfers.
Voraphol Sokatiyanuluk, an NLA member, said there were already other laws that empowered the Revenue Department to investigate tax evaders, so this amendment was unnecessary.
He added that the new requirements put additional burdens on financial institutions, as they will have to report transactions to the authorities.
ORIGINAL STORY: The Nation
Finance Minister foreshadows slowing economy in 2019
“We expect the GDP growth for 2019 to be at least 4 per cent. However, the economic growth for 2019 is expected to be slower than 2018,”
Finance Minister Apisak Tantivorawong predicts Thailand will encounter slower economic growth in 2019,. The Minister cites uncertainty from the trade war between China and the US, the upcoming Thai election and a slump in tourism as the key factors.
The Nation reports that Apisak made the comments at an event organised by the engineering faculty of Chulalongkorn University.
“The peak of the current economic cycle was during the first two quarters of last year, followed by an acute slump in the third quarter. Given that consumption and private investment are still continuously growing, we expect the economy to continue to grow in 2019, but at a slower pace.”
The first two quarters of this year saw growth of 4.8 per cent year on year. The economy managed growth of only 3.3 per cent in the third quarter and a recovery is expected in the fourth quarter, but not at the pace seen for the first two quarters, Apisak said at the Chulalongkorn event, the Engineering Dinner Talk.
Growth in exports is also expected to slow in 2019. This is due to the lagging negative impact of the trade war between the US and China, with some of the consequences to be felt next year.
“Many have suggested that Thailand can gain from the trade war through replacing Chinese goods in the US market and manufacturers moving their production base from China to Thailand. However, in the long-term, the trade war will only hurt the Thai economy,” the minister said. This is because Thailand is deeply entrenched in the supply chain, which is affected by the tariffs imposed by the two economic giants, he said.
At the event, Apisak addressed the relationship between the upcoming election and growth in foreign direct investment in the Kingdom.
“After talking to many foreign investors, they have said that they are holding off investing in Thailand until after the election. This is because they fear that political stability will be damaged as a result of the election,” said Apisak.
The final key factor likely to contribute to slower economic growth in 2019 is the decline in tourism. Visitor numbers have slumped significantly since a boat accident near Phuket in the middle of this year.
In August, 867,000 Chinese tourists visited the Kingdom, down 11.7 per cent month on month. In September, only 648,000 came, marking an even steeper 14.89 per cent fall month on month, according to the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB).
Apisak said the boat accident – which claimed the lives of dozens of mostly Chinese tourists – had led many Chinese to question Thailand’s safety standards, but it was not the only cause of the fall in tourism numbers.
“Tourism has also fallen as a result of external factors which we cannot control,” he said.
“The slowing global economy has led key tourist groups visiting Thailand to decrease.
“The slowing of the Chinese economy as a result of the trade war and the weakening of the yuan currency have led to falls in the number of Chinese tourists globally.”
With the declines in exports and tourism, Apisak said investment in the Industry 4.0 policies championed by the government, with the Eastern Economic Corridor (EEC) as a major component, will be the key driver of growth in 2019.
“The EEC is expected to be a key focal point of investment in 2019,” Apisak said. “With strong private investment levels in 2018, we expect this trend to continue into next year. Public investment in infrastructure and transportation throughout the country will intensify in 2019.
“Meanwhile, foreign direct investment into the EEC is also expected to rise after the election in February next year.”
Finance Minister Apisak Tantivorawong speaking at Chulalongkorn University
ORIGINAL STORY: The Nation
Co-working space – not just for start-ups
PHOTO: HUBBA-TO co-working space in Bangkok
by Thanchanok Phobut | Senior Coordinator, CBRE Thailand
CBRE, an international property consultancy company, reveals that co-working space seems to be on the tip of everyone’s tongue these days. There was a time when no-one knew what the term “serviced office” meant or why someone would want such an option. But today, you can’t open a business publication without seeing an article about co-working. Most people think of co-working spaces as being a thriving hub of young latte-sipping, technology entrepreneurs, coming up with the next big idea that will make them multi-millionaires.
While there is an element of truth to this image, the end-goal for many co-working space operators is to change the way that companies, not just start-ups, source their office space. They want companies to pay for office space as a service rather than follow the traditional route of signing a lease, fitting out their own space, having an office manager maintain the premises and hiring their own employees for reception and administrative duties.
Co-working office operators usually offer companies their own private space. It is most common to be offered an office based on the size you will need to fit in a set number of desks. For example, if your company has four employees, your package offer will include a furnished closed office with four desks, 4 chairs and optional telecommunications equipment for four people (internet service, phone number and a telephone handset).
There is usually a common kitchen area and spaces to meet and mingle. Think of it like a five-star hotel, you’re not sharing a room, but you are getting a high level of service and amenities on the premises.
You usually have a short-term commitment, not signing a lease for years. The best deal is usually for a year or more, but you can lease your office for as short as one month. Starting and ending your relationship with an operator is most often quick and easy. Since the office is already outfitted and reception services provided, getting to work is much quicker than when you need to design your new space yourself or hire your own support staff.
“Competition in the space is red hot. As more and more offices pop up, the fight to achieve 100% occupancy is fierce. When shopping for your space, be sure to consider more than just price, as the services and reputation of your provider are just as important.
“If you do your homework, you’ll avoid the pitfalls of co-working space, such as unreturned deposits, unexpectedly thin walls between units or fees for things like coffee and copying that you didn’t expect. The great news is, changing providers is much easier than with traditional space,” states Mr. Nithipat Tongpun, Head of Advisory & Transaction Services – Office, CBRE Thailand.
According to a recent CBRE report on the New York City office market:
- While traditional long-term leases are the preferred model for business and the foundation of the commercial office market, the rapid growth of third-party flexible space operators provides occupiers with a wide variety of options for leasing office space. Since 2013, when the expansion of third-party flexible space began to gain significant traction, the sector has averaged an annual growth rate of 22 percent.
- There are strong indicators of user demand for the services of the third-party space providers. In fact, 75 percent of corporate occupiers anticipate including co-working or flexible space in their occupancy portfolio over the next three years.
- Smaller users also continue to be an important part of the target market; as the flexible space footprint has grown in Manhattan, the amount of traditional leasing among tenants under 5,000 sq. ft. has dropped off by 42 percent between 2013 and year-end 2017, suggesting that these users are migrating to flexible space solutions.
In Bangkok, four large co-working space operators are opening in multiple locations. JustCo, Spaces, The Great Room and WeWork leased a combined total of 25,000 square metres of space in some of Bangkok’s best office buildings last year and they are still growing.
“I recently met Yvan Maillard, general manager of The Great Room‘s Singapore operation and he said that, in Singapore, 30% of his clients are late stage start-ups, 30 % are private investment family offices and 30% are mainstream corporates. In the case of corporates, they often lease co-working space as a stopgap before finding a larger permanent office for their expanding team,” said Mr. James Pitchon, Head of Research and Consulting, CBRE Thailand.
It is not only the way companies source their office space that is changing. Even those companies who continue to lease office space directly are changing the way that they use the space – having your own office or even your own desk is out of fashion – agile working is all the rage.
Mr. Nihipat added, “Companies are providing employees with a daily choice of environments from quiet space to a layout that enables teams to collaborate. Employees are expected to move around the office, depending on their tasks. The objective is to create a workspace that fulfills the employees’ needs in a high-quality environment, while minimizing the number of individual desks needed, effectively putting more people to work in less space.”
Globally and in Bangkok, the office market will continue to evolve and while traditional leases are yet to be seen as a thing of the past, CBRE expects more companies to provide agile working environments. CBRE also expects to see significant growth in the amount of co-working spaces provided by third party suppliers.
“This will mean an increase in the demand for high quality buildings with flexible, column free floor plates, technically advanced air conditioning and temperature control, as well as sufficient lift capacity to deal with higher rates of occupation density.
Many of the new generation of buildings currently under construction or being planned in Bangkok will have these features and we won’t be surprised to see more and more co-working spaces open their doors as companies weigh the real advantages of this option versus traditional space.
SHOW DC launches new 60,000 capacity outdoor SHOW DC Arena
Latest event space establishes SHOW DC’s positioning as the events venue of choice in downtown Bangkok with combined capacity of 90,000
Large scale events have a new stage in downtown Bangkok at SHOW DC, which has launched the biggest outdoor event venue in the city. Named SHOW DC Arena, the 120 million baht investment in a 31,790 sqm outdoor entertainment space that sits adjacent to the SHOW DC shopping centre, bolsters the retail complex’s event offerings which already includes multiple indoor and outdoor event spaces, and has more than 40 event days booked through Q2 2019.
The new open entertainment space can cater to a 60,000 pax capacity event with 1,000 car parking spaces, a rarity in central Bangkok.
“There’s huge demand for a large outdoor entertainment space in the centre of Bangkok, and SHOW DC Arena fulfils this need. Thailand’s events and entertainment industry is robust and we are seeing increased inquiries from organisers.
“SHOW DC Arena offers a large, flexible event space that can cater to upto 60,000 people and I’m confident that our downtown location in Rama 9 area, combined with the availability of parking spaces and free shuttle service to MRT Petchaburi station, will help make events even more accessible and attractive to attendees and organisers alike,” said Mr. Goh Soo Sing, Chief Executive Officer of SHOW DC.
SHOW DC Arena has already been chosen as the venue for several high profile events including the recent Chang Music Connection Musictropolis which Bodyslam and Potato headlined, and MAYA Music Festival 2018 on 8-9 December, which has a stellar line-up including global DJs, K-Pop and J-Pop superstars.
SHOW DC Arena can be booked in any combination with the 25,000 people capacity SHOW DC Oasis and 5,000 people capacity SHOW DC Garden to create an even larger outdoor event with a total capacity of 90,000.
In addition to offering the largest outdoor event space in the centre of Bangkok, SHOW DC also has numerous indoor spaces that can be used for many event formats, such as shows, product launches, parties, concerts, theatre performances and exhibitions. The large indoor Ultra Arena is a state-of-the-art performance arts theatre with VIP balcony seating and has a capacity to hold up to 1,000 attendees.
“Thailand’s events and entertainment industry is a significant economic generator for the country. Through SHOW DC Arena and our additional event spaces at SHOW DC, we are well positioned to support domestic and international event organisers, and will work with organisers and brands to make Thailand a strategic events hub in the region,” added Mr. Goh.
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