Tax exemption for corporate insurance payouts amid flood recovery
The Cabinet has sanctioned a tax exemption for corporate income derived from insurance payouts for policyholders impacted by this year’s floods.
Government spokesman Jirayu Houngsub announced after the Cabinet meeting that companies in flood-affected areas with insurance coverage against floods will have their insurance payouts exempted from income tax, as per the Finance Ministry’s directive.
For business operators needing loans to repair flood-related damage, the ministry has introduced soft loans amounting to 50 billion baht (US$1.5 billion). These loans carry an interest rate of 3.5% for the first two years, with a ceiling of 40 million baht (US$1.2 million) per borrower.
Applications are to be submitted through state financial institutions and 16 commercial banks nationwide. Businesses without sufficient collateral can receive loan guarantees from the Thai Credit Guarantee Corporation (TCG). TCG is set to provide guarantees totalling 1 billion baht (US$30 million), with individual guarantees ranging from 10,000 baht to 2 million baht (US$300 to 60,100). The guarantee fee stands at 1.25%, and the guarantee period extends up to 10 years, facilitating easier credit access for small businesses.
Other supportive measures include the Government Savings Bank’s scheme to offer a principal repayment holiday and interest suspension for six months on loans up to 10 million baht (US$300,500) per borrower. Additionally, the government has urged private financial institutions to reduce the minimum payment for credit cards to 3% for three billing cycles.
Jirayu noted that this year’s floods have impacted up to 50 provinces, with the northern region suffering the most. The Thai Chamber of Commerce and the University of the Thai Chamber of Commerce have projected the cost of flood damage in 2024 to be between 30 billion and 40 billion baht (US$901,450 and 1.2 million), equating to 0.21% of GDP, reported Bangkok Post.
An assessment as of yesterday, October 15, found the agricultural sector to be the hardest hit, with damage estimated at 27.4 billion baht (US$823 million). The service sector followed with 9.2 billion baht (US$276 million) in damages, and the industrial sector sustained losses amounting to 287 million baht (US$8.6 million).
