Thailand’s finance ministry drops plan for financial transaction tax

Paopoom Rojanasakul, secretary to the finance minister, announced a reversal from the Finance Ministry’s initial plan to impose a financial transaction tax. This comes after Sirikanya Tansakul of the Move Forward Party (MFP) claimed the ministry’s mid-term fiscal blueprint for 2024 projected revenue of 14 billion baht from the proposed tax.

Paopoom explained that the ministry aims for Thailand’s capital market to maintain high liquidity, stability, trading volume and quality, combined with low funding costs. These factors are essential to attract investors and registered companies.

Furthermore, Paopoom stressed the importance of the Thai capital market’s competitiveness against international markets, particularly Singapore. To foster this competitiveness and support long-term investment, tax incentives for the stock market are crucial. As a result, the ministry has dropped the idea of a transaction tax.

Our goal is for the Stock Exchange of Thailand to expand and become a cornerstone of the economy, fostering a private sector-led economy, Paopoom expressed.

Excluding the digital wallet policy’s impact, the ministry is confident about achieving its target revenue through economic growth and efficient tax collection.

Rojanasakul anticipates the government’s digital wallet scheme, set to launch in the first quarter of next year with a budget of 560 billion baht, will stimulate monetary circulation. This, in turn, is projected to generate around 100 billion baht in tax revenue from value-added tax and corporate income tax.

Pornchai Thiraveja, director of the Fiscal Policy Office, affirmed that the government’s fiscal plan for 2024-2027 estimates a revenue of 2.787 trillion baht for fiscal 2024, an increase of 30 billion baht.

The budget expenditures are projected at 3.48 trillion baht, resulting in a budget deficit of 693 billion baht. Thiraveja confirmed that the initial projection included a 14 billion baht revenue from the proposed financial transaction tax.

As per the 2018 Fiscal Discipline Act, the viability of imposing such a tax is open for evaluation, Bangkok Post reported.

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