On November 29, The Cabinet has approved a green light for a transaction tax of 0.1% after 30 years of tax exemption.
Mr. Arkhom Termpittayapaisith, the finance minister, said that the cabinet decided to revoke a law for exempting stock market share trades from financial transaction tax which has been force since 1991. Stock trade transaction tax has been waived for a long time and other countries have also collected such a tax. In past, the tax exemption was to encourage investment in the stock market. He said that the government is expected to gain at least 16 billion Baht.
Share traders will be given a 90-day grace period before the law comes into force. Starting from 2023, authorities will set the tax at 0.055% in the first year. Which come from 0.05% of financial transaction tax and local tax at 0.005%. It will take effect from the date of the announcement until December 31, 2023.
Then in 2024, government will adjust selling tax at a ceiling of 0.11%. Which come from 0.1% of financial transaction tax and local tax at 0.01%. Which should produce around 16 billion Baht of revenue per year.
Mr. Arkhom said “The government has considered very well that this type of taxation on the sale of shares will not have much effect on small investors.” If combine a transaction tax with transaction fee, it will become an amount at 0.22% which quite close to many countries such at Malaysia(0.29%), Hong Kong(0.38%) and Singapore(0.2%). Which still Still less than many places that collect both purchase and sale taxes. Also, there are some countries that collect taxation of capital gains as well such as U.S.A.
However, various types of Retirement Savings Funds remain exempt from financial transaction taxation.
On December 9 Mr.Lawaron Saengsanit, Revenue Department Director-General, said that the Revenue Department has studied the issue of stock collection very carefully. He insisted that 0.1% is just the ceiling rate and the actual rate has not been set yet. It is expected to start collecting in May 2023.
