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https://www.nationthailand.com/thailand/economy/40022673

Thai govt reforming revenue generation to repay Covid debt: Finance minister

FRIDAY, DECEMBER 02, 2022

The government is reforming revenue generation to repay the huge debt it built up with schemes to mitigate the impacts of Covid-19 in the past two years, Finance Minister Arkhom Termpittayapaisith revealed on Thursday.

During a special talk organised by Krungthep Turakij and Thansettakij, Arkhom said the government had borrowed more than 1.5 trillion baht to tackle the Covid-19 crisis, causing public debt to increase.

He added that people were also suffering from rising household debt after more than two years of Covid-19 hardship.

“We have to repay debt when we are in debt,” he said.

The government is now reforming its revenue generation to increase its ability to repay the debt, Arkhom added.

The Cabinet on Tuesday approved a tax on trading in the Stock Exchange of Thailand (SET).

The plan to tax SET traders has been around for 30 years but successive governments have waived it to support market development.

The move, which was proposed by the Finance Ministry, is expected to generate 10-20 billion baht per year for the government.

Arkhom said debt repayment potential is important for both the government and the people.

“If we borrow more cash, it will cause inflation to rise, and our currency will weaken compared to the US dollar,” he said.

He said the government has also launched debt restructuring measures, such as switching debt from short term to long term, seeking low-interest loans and mitigating volatility in currency exchange.

The government’s revenue reform come as Thailand faces economic challenges including high inflation, falling exports and lower-than-expected tax revenue. The government projects inflation at 6% this year, well above the Bank of Thailand’s 3% target. Exports also dropped 4.4% year-on-year in October while tax revenue in the third quarter fell 5% short of the target.

Related stories:

• Thai govt revenue in FY2022 exceeds target as economy rebounds
• Finance Ministry to spend THB10bn on recapitalising Thai Airways
• Post-Covid situation, economic recovery on agenda of Apec finance ministers’ meeting this week

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https://www.nationthailand.com/thailand/economy/40022669

Surging baht prompts expectation of response from Bank of Thailand

FRIDAY, DECEMBER 02, 2022

The baht opened at 34.78 to the US dollar on Friday, strengthening from Thursday’s close of 35.00 to a six-month high.

The currency will likely move between 34.65 and 34.90 against the greenback during the day, Krungthai market strategist Poon Panichpibool said.

Poon said the baht strengthened quickly as expected after passing its support level of 35.

Upward pressure on the Thai currency is coming from the dipping dollar, gold sales, and foreign purchases of Thai bonds and stocks, he added.

Poon expects that pressure to continue on Friday, especially from gold sales and foreign investors potentially buying more Thai bonds amid the continuous drop in US 10-Year bond yields.

However, he expects the Bank of Thailand will respond to the baht’s sudden rise.

Moreover, investors shorting the baht might start selling the currency as it nears the technical support level of 34.75, which would slow its rise in the short term.

Poon said investors may also be waiting for US labour data this week before adjusting their positions. He forecast the baht could test its resistance level of 34.50 if the data shows a slowdown in US employment. Better-than-expected US data, however, could see the baht weaken and test its resistance level at 35.

Poon advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.

Related stories

• Baht strengthens to 5-month high against the dollar
• Bank of Thailand raises policy rate by 25 points to fight inflation
• Baht rebounds on expectations that China will ease Covid controls

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https://www.nationthailand.com/thailand/economy/40022656

Bangkok’s two international airports set for major expansions, minister confirms

THURSDAY, DECEMBER 01, 2022

Airports of Thailand Plc is preparing to call for bids early next year for the expansion of Suvarnabhumi International Airport and Don Mueang International Airport to handle the rising number of passengers, Transport Minister Saksayam Chidchob said on Thursday.

The minister made the comment while speaking to reporters after chairing the AOT Sister Airport CEO Forum 2022, where attendees discussed the improving outlook for the aviation industry globally and in Thailand.

In October alone, about 3 million passengers used Thai airports, compared to an average of about 1.22 million per month from January to September, Saksayam said.

He said his ministry had reminded AOT Plc – which operates six airports – to prepare for the full recovery of air traffic to pre-Covid levels in 2024.

AOT will hold a tender next year for the construction of a new, 10 billion baht passenger terminal on the east side of Suvarnabhumi airport, Saksayam said.

He said AOT is also drafting a master plan for further expansion of Suvarnabhumi, which will see the addition of two more passenger terminals: one to the west of the main terminal and another to the north.

The minister said AOT also plans to hold a tender for the third phase of the expansion of Don Mueang airport, which will have a budget of 36 billion baht.

AOT vice president Kirati Kitmanawat said the company had raised the construction budget for the new passenger terminal on the east side of Suvarnabhumi from 8 billion to 10 billion baht.

The construction plan will likely be presented to the AOT board of directors in March. Once approved, it will be sent to the National Economic and Social Development Council for endorsement before being submitted to the Cabinet for approval.

The bidding is expected to be held in the middle of next year and the project winner will be selected within 12 months, with construction expected to start in 2024, Kirati said.

He said that when the east passenger terminal opened in 2028 and it would allow Suvarnabhumi to increase its capacity to 15 million passengers a year.

He said AOT would sign a contract to hire the International Civil Aviation Organization for 20 million baht to review its west and north expansion projects at Suvarnabhumi to ensure they are aligned with developments in the aviation industry.

The AOT Sister Airport CEO Forum 2022 was the third of its kind. AOT executives met representatives of companies and organisations that have signed sister airport agreements with AOT. The agreements span 17 airports in 10 countries.

Representatives of international organisations, airlines and government aviation agencies attended the forum to exchange knowledge and views on airport management and measures following the end of the Covid-19 pandemic. This year’s forum was held under the theme of “Resilience, Reunion, and Reinventing for Aviation Sustainability”.

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https://www.nationthailand.com/thailand/economy/40022655

Investment board unveils new measures to transform Thai economy

THURSDAY, DECEMBER 01, 2022

Thailand’s Board of Investment (BOI) has developed nine measures to attract more investment into smart and sustainable industries as part of the effort to create a “new economy” in Thailand – one focused on innovation and sustainability.

BOI secretary-general Narit Therdsteerasukdi said on Thursday that its executive board has endorsed the new measures and that they will take effect on January 3.
The nine measures are part of the five-year investment promotion strategy (2023 to 2027) designed to help the economy focus on innovative and sustainable growth, Narit said.
One of the nine measures is to encourage more investment into industries important to national development, including electric vehicle manufacturing, food of the future, and the space industry, Narit said. Others include boosting the competitiveness of industries through research and development, retention and expansion programs, relocation programs, and upgrading to smart and sustainable industries, Narit added.
Incentives include tax exemptions for three to 13 years, he said.

The five-year strategy that the nine measures are part of aims to transform the Thai economy into one driven by technology, innovation and creativity. It also places environmental and social sustainability at its core. The new economic model is intended to ensure balanced and sustainable growth.
The strategy involves industrial restructuring to strengthen Thailand’s industrial potential and supply chain, transformation to smart and sustainable industries, positioning Thailand as a regional hub for international business and trade, strengthening startups and SMEs, and encouraging Thai entrepreneurs to invest more overseas.

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https://www.nationthailand.com/thailand/economy/40022653

Recovering passenger traffic boosts AOT’s expectations of net profit in Q1

THURSDAY, DECEMBER 01, 2022

Airports of Thailand (AOT) is confident of reporting profits for the first quarter (October to December) of fiscal year 2022-23 as passenger numbers rise to 70% of pre-pandemic levels.

AOT president Nitinai Sirismatthakarn on Thursday said that the number of average passengers at six AOT airports is around 270,000 per day. The number has increased significantly from September when the average was around 190,000 passengers per day.

“Currently, passenger traffic has reached around 70% of the pre-pandemic 400,000 passengers per day,” he said.

Before the Covid-19 pandemic, 30% of passengers were tourists. However, Chinese tourists have not returned yet, but the number of passengers is still recovering continuously, he said.

He added that the domestic markets have fully recovered while there are also new markets including the Middle East and India.

Nitinai said that the significant growth in recovery next year will depend on the Chinese situation, but AOT believes the number of passengers will be close to 2019 figures.

He was positive of AOT achieving a small net profit for the first quarter of the current fiscal year due to the festival celebrations in December.

Meanwhile, the AOT will open a Satellite Airport Terminal 1 (SAT-1) for Suvarnabhumi Airport in September 2023 to handle the high number of tourists in the cold season.

The SAT-1 is ready to open if there Suvarnabhumi Airport’s terminals are crowded, he said.

Related stories

• AOT’s losses drop this year as Thailand reopens to tourists
• AOT shelves Phang Nga airport viability study for now
• AOT to start managing Udon Thani, Buri Ram, Krabi airports from 2023

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https://www.nationthailand.com/thailand/economy/40022647

Govt moving fast to streamline registration process for multinationals to open regional HQs

THURSDAY, DECEMBER 01, 2022

Four state agencies will meet in the middle of this month to discuss setting up a new one-stop service to make it more convenient for multinational corporations to open a regional headquarters in Thailand.

The move follows an instruction from Prime Minister Prayut Chan-o-cha that the four agencies collaborate to encourage more multinational firms to open their regional headquarters here, deputy government spokeswoman Traisuree Taisaranakul said on Thursday.
She said officials from the Board of Investment, the Revenue Department, the Department of Business Development, and the Bank of Thailand will meet in the middle of this month to fast-track one-stop service.
The meeting will be chaired by Deputy Premier and Energy Minister Supattanapong Punmeechaow, Traisuree said. The minister chairs a government subcommittee focused on reducing obstacles to investment.

Traisuree said the one-stop service would allow multinationals to register a regional headquarters in Thailand at a single office, releasing them from the requirement to seek permission from four different agencies at four separate locations.
She also said the prime minister is confident that Thailand’s economic outlook is bright, explaining that his assessment is based on an increased interest in investment expressed directly to him by American and European business people he met recently.
The US and European executives also expressed support for the government’s efforts to transform Thailand into a hub for international businesses, Traisuree said.
The government offers a number of tax benefits and incentives for multinational corporations to open regional offices in Thailand. Many already have, including Agoda, Exxon Mobil and Alstom-Bombardier.

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https://www.nationthailand.com/thailand/economy/40022643

Budget Bureau, development council support financial transaction tax

THURSDAY, DECEMBER 01, 2022

The Budget Bureau and the Office of the National Economic and Social Development Council told the Cabinet they support its decision to start levying a tax on stock trading, which has been exempt from taxation for 30 years, according to reports from the two agencies released Thursday.

The public release of the reports supporting the financial transaction tax followed renewed criticism from the private sector that the tax was poorly timed.

A tussle between the private and public sectors erupted after the Cabinet on Tuesday gave the green light for the Finance Ministry to start collecting a financial transaction tax on trades on the Stock Exchange of Thailand (SET). Trading on the SET has been tax exempt for 30 years.

The Cabinet’s decision, which stipulates that SET investors must pay a tax equivalent to 0.1% of share sales, will take effect 90 days after the draft royal decree issued under the revenue code is announced – likely sometime in the second quarter of next year. However, during the first year, the tax will be only 0.055% of share sales.

After the Cabinet approved the tax, the Federation of Thai Capital Market Organisations reiterated its criticism of the tax, saying it was poorly timed and could undermine the market.

The government responded on Thursday by publicly releasing reports from the Budget Bureau and development council that showed both agencies support for the tax.

In a report to the Cabinet, the development council said the financial transaction tax proposed by the Finance Ministry should be approved and that it would not undermine the SET. It also said the tax would promote fairness and increase the efficiency of the Finance Ministry’s tax collections.

The development council, however, disagreed with the Finance Ministry’s plan to exempt the tax on shares sold by stock-trading funds controlled by the Social Security Office, pension and provident funds.

Such funds should not be encouraged to invest in stock markets because share prices are volatile and, as a result, the beneficiaries of the funds could be damaged.

The Budget Bureau told the Cabinet the financial transaction tax would make tax collection fairer and reduce income inequality.

The Budget Bureau also said the financial transaction tax would have no impact on the development of new products on the SET, dismissing claims from the Federation of Thai Capital Market Organisations that it would.

Related stories:

Government gives the go-ahead for tax on share sales in stock exchange

Financial transaction tax is poorly timed, industry group warns

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https://www.nationthailand.com/thailand/economy/40022640

Commerce Minister moving swiftly on high-speed access to China’s market

THURSDAY, DECEMBER 01, 2022

Exports of Thai fruit and vegetables to southern China will increase after the Mohan railway checkpoint opens on December 1, Commerce Minister Jurin Laksanawisit said on Thursday.

The high-speed railway running through Laos to southern China will make transport swifter and less expensive, Jurin said, adding that China’s General Administration of Customs had finished its inspection of the checkpoint and given the green light for fruit and vegetables to be imported through it on Wednesday.

The checkpoint will start operating on December 3, the first anniversary of the high-speed railway’s launch.

Jurin said approval to import fruit and vegetables through the new checkpoint opened a new opportunity for exporters and importers, explaining that rail transportation is a cheaper and faster way to ship to southern China. Fruit and vegetables are less likely to rot during transport by high speed rail, the minister added.

Once they arrive in Yunnan province, the fruit and vegetables can be distributed to other regions of China, Jurin said.

He urged Thai exporters to start planning now, saying: “To make the most of the Laos-China high speed rail, Thai exporters must plan early with logistics companies, and clarify their understanding of laws and regulations on imports in China.”

Jurin said the opening of the new checkpoint for imports in China will enhance the value of the high-speed railway for trade, making exporting and importing between China and Thailand more convenient.

He also said it would increase Thai exports to China.

Yunnan province has great potential as a market for Thai food and services as it is the closest Chinese province to Thailand and is integrated with mainland Southeast Asia by highways and the high-speed railway.

Jurin announced that he has appointed ambassadors to accelerate the creation of a Thai-Chinese logistics network to increase the number of companies offering logistics services between the two countries and reduce their costs.

Related stories

• Frozen food business heats up with surge of new entrants
• Trip by Hong Kong importers lands Thailand 81,200 tonnes rice export orders
• Poor-quality durians on Shanghai roadside not from Thailand, ministry clarifies