E-commerce tax to be enforced for overseas companies
The Thai government has set up an online team to support fair tax collection on the new e-tailer tax that is hoped to make e-tailers pay the same tax that locally based businesses do. The law will change from allowing a company that has no physical presence in the country to avoid paying taxes to stating that any business or transaction being conducted in Thailand is liable for taxation, regardless of whether the business has an established presence in the country. There are currently about 500,000 websites offering items for sale, of which 350,000 are located in Thailand. Tax revenues from online businesses was 1 billion baht during 2016-2017, far below the estimated 100 billion baht in online transactions in the country during the same period. Indonesia, Taiwan, and India are some other countries that have imposed an e-commerce tax.
The Board of Investment (BOI) is considering extending tax privileges for small to medium business enterprises (SMEs) for another three years as the current measures are due to expire on December 31, 2017. The measures would help Thai SME’s who account for about 99 percent of all Thai businesses, there are around 2.74 million SMEs nationwide. The BOI approves around 1,000 projects for investment promotion each year, of which two-thirds are for SMEs. The investment promotion is for 38 categories including glass production, jewelry and ornaments, auto parts, software, pharmaceuticals, printing and film production. The promotions include corporate tax exemption for two more years and apply used machinery. Eligible companies must be 51 percent Thai owned, maintain a debt-to-equity ratio of 3:1 and have investment cost of at least 200 million baht, excluding land, working capital or net fixed assets.
The Consumer Confidence Index rose to a 33-month high last month, rising for the fourth straight month as confidence in the economy grew in part due to continued growth in exports and rising tourism for the high season. Exports rose 13.1 percent year on year in October to 658 billion baht or US$20.1 billion. The first ten months of the year has seen a 9.7 percent growth an exports totaling US$196 billion. The stronger baht is a concern as it hit 32.5 baht to the US dollar, the highest in 31 months. The survey by the University of the Thai Chamber of Commerce (UTCC) forecasts economic growth to reach 4.2 – 4.5 percent in 2018 while the National Economic and Social Development Board (NESDB) has revised its GDP growth forecast for 2017 to 3.9%, up from the previous forecast of 3.7%.
Thailand’s first Michelin guide for Bangkok came out last week and while street stalls received mentions, none were given stars. Thailand has three two-star restaurants, 14 one-star restaurants and 35 Bib Gourmand restaurants -- a new category without stars created to provide recommendations to diners that was expanded to promote Bangkok’s street food. The guide selected 98 restaurants after 8 months of surveys. Gaggan, Le Normandie and Mezzaluna were the only restaurants to receive two stars. The Michelin guide covers 28 countries and selects the best culinary experiences revealing new trends and new chefs. The new guide is expected to boost Bangkok tourism as tourists come to visit the restaurants in the guide.