|Thailand Update | December 13, 2019
Authors: Ella Duangkaew and Monica Chritton
January 9, 2019: Thailand Committee Call with Ambassador Virachai Plasai: Please join us for a Thailand Committee Call with His Excellency Virachai Plasai, Ambassador of the Kingdom of Thailand to the United States. Ambassador Virachai will provide an update on recent political and economic developments in Thailand and the future trajectory of bilateral relations, as Thailand assumes the 2019 ASEAN Chairmanship Year and prepares for elections in February. Click here to register for the call.
|THE COUNCIL'S TAKE|
New Revenue Code Amendment to Require E-Payments Disclosures
The National Legislative Assembly (NLA) has passed a Revenue Code Amendment aimed at reducing fraud, investigating tax obligations and effectively capturing tax from e-commerce businesses. Under the new amendment, any financial institution must disclose information to the Revenue Department for customer accounts with over 3000 deposits and money transfers annually of any annual amount, or accounts with more than 400 deposits and money transfers totaling over 2 million THB (roughly US$61,087) annually.
The Revenue Department has developed the amendment to better capture taxes on e-payments, as it previously lacked the necessary information to do so. The Revenue Department currently reports data showing that only 65% of juristic enterprises file tax returns, and that a large number of self-employed individuals do not pay taxes. Deputy Minister of Finance Wisudhi Sripuphan said that the bill amending the Revenue Code is intended to create more sustainable tax collection, and is not solely intended to target online traders. The Deputy Minister also noted that 2.4 million people are not in the tax system.
E-payments organizations in Thailand have expressed concern that the new tax policy could prevent widespread adoption of e-commerce payments and discourage the beneficial transition towards a more cashless society. Merchants who previously only needed to report a summary will now be required to disclose more detailed information to the Revenue Department, which will introduce additional burden. Thus, to avoid this disclosure burden, smaller merchants may prefer to use cash instead of e-payments. This reporting burden also drew comments from within the NLA, with some members stating that their own accounts would require reporting of transactions from meeting allowances and donations to Buddhist temples.
Although the Revenue Code amendment is intended to ensure fair competition and create more convenient and effective tax collection, its effect on e-commerce and e-payments may affect Thailand’s vision to become a cashless society. Thailand has emphasized the benefits of e-payments and has prioritized its goal of becoming a cashless society in its National e-Payments Master Plan and through its PromptPay e-payments system established through public-private partnership. PromptPay services began in 2017 and the service currently has 42.6 million registrants. According to the Bangkok Post, the Bank of Thailand reported 375 trillion THB (about US$ 11.4 trillion) in online transactions in June 2018, which was an increase from 250 trillion THB (US$7.6 trillion) in June 2017. Given the existing and projected benefits of e-Payments, it will be critical for the Revenue Department to develop regulation that will enable easy and increased use of e-Payments, and remove provisions that would introduce any kind of burden in the process. Such innovation-enabling and flexible legislation is crucial to the realization of the country’s goals under Thailand 4.0, which will become amplified as Thailand takes on the 2019 ASEAN Chairmanship with digital innovation as a key theme. This legislation closely follows the development of other digital economy related regulations, such as the Personal Data Protection Bill and the Cybersecurity Bill. The Ministry of Digital Economy aims to pass both of these regulations by the end of the year, prior to elections. Upon passage, it will be critical for these regulations to be transparent and in line with international best practices, especially to position Thailand as a leader in digital economy development, in line with its ASEAN Chairmanship themes to advance digital prosperity and innovation.
National Council for Peace and Order (NCPO) Officially Lifts Ban on Political Parties
In another sign that the much-anticipated and oft-delayed elections could be underway in 2019, the National Council for Peace and Order (NCPO) has lifted its ban on political parties on December 11. Up to this point, the NCPO had only partially relaxed the ban (see more information on the partial lift in our previous Update here). According to the Bangkok Post , the full lift of the ban will occur when the law on MPs, the last organic bill on elections, takes effect, which will also set a 150-day deadline for the election. The chain of events following this timeline will set the general election for February 24 and see a new government by May 2019. For more information on the general election timeline, see our previous Thailand Update here.
The Bangkok Post reports that the NCPO confirmed it will lift nine key orders restricting political activities, and that it proposed the February 24 election date at a December 7 meeting with political party members, representatives of the National Legislative Assembly (NLA), the Election Commission (EC) and the Constitution Drafting Committee. Two major parties – the Democrats and Pheu Thai – opted out of the meeting.
The February 24 election date must still be officially announced by the EC, which is likely to happen on January 4,two days after a royal decree to hold an election is granted. Though the lifted ban will allow for political campaigning to commence, it remains unclear how freely parties may be able to campaign, particularly if the ban on the gathering of more than 5 people for political purposes remains intact. . NCPO Chief and Prime Minister Prayut Chan-o-cha, who may also be nominated as a candidate in the upcoming elections, recently stated that an elections campaigning “framework” is necessary to see a smooth transition to democracy, although there are not yet details on what this framework would consist of and if it is currently in development by the Government. The full lift of the ban on political activities is a highly-anticipated and positive step along the election roadmap; however, lifting the ban only about two months before the proposed election deadline may appear to not grant enough time for parties to sufficiently campaign. For example, in both the Malaysian elections last year and the Indonesian elections this year, candidates began campaigning nearly a year before the election dates, which is considered typical, and sufficient, time for campaigning. To appear equitable with its ASEAN neighbors, Thailand may need to consider pushing back its election date, which has a set deadline of May 5, to allow for greater campaigning time.
|IN THIS UPDATE|
|Multilateral Trade Agreements
Somkid opts out of trade treaty Bangkok Post 11th Dec 2018
Ministry hastens to make CPTPP deal before February Bangkok Post 4th Dec 2018
Trade Department pushes 12 priorities for Asean chair Bangkok Post 3rd Dec 2018
Royal Gazette publishes NCPO’s order to lift political ban National News Bureau of Thailand 12th Dec 2018
Election officers to be appointed early Jan 2019 National News Bureau of Thailand 7th Dec 2018
Political parties' meeting tomorrow to reveal clearer election date National News Bureau of Thailand 7th Dec 2018
DSD, TIFFA provide training for unemployed graduates National News Bureau of Thailand 7th Dec 2018
Cabinet approves slew of measures for New Year National News Bureau of Thailand 7th Dec 2018
Report: Thailand most unequal country in 2018 Bangkok Post 6th Dec 2018
Govt prepares anti-human trafficking progress report National News Bureau of Thailand 5th Dec 2018
Thailand’s foreign election observer ban is an unusual step The Jakarta Post 3rd Dec 2018
Thailand’s military is working to further link major weapon systems Defense News 11th Dec 2018
Finance Min: state welfare card holders given 5% VAT refund National News Bureau of Thailand 13th Dec 2018
Office of SME Promotion launches global connectivity program for SMEs National News Bureau of Thailand 13th Dec 2018
130 SME training projects due 2019 by NEA Bangkok Post 13th Dec 2018
Bank of Thailand treads gently on fee charges Bangkok Post 7th Dec 2018
Min of Energy to use raw palm oil for natural gas production National News Bureau of Thailand 7th Dec 2018
Thai Oil poised to start Clean Fuel Project Bangkok Post 6th Dec 2018
Food & Agriculture
20-year water plan tipped for approval Bangkok Post 7th Dec 2018
Govt approves financial assistance for rubber growers National News Bureau of Thailand 7th Dec 2018
Thailand leads charge to protect soil Bangkok Post 6th Dec 2018
Thailand secures orders for more than 300,000 tons of rice National News Bureau of Thailand 4th Dec 2018
Commerce Ministry promotes dairy products export under FTA dealings National News Bureau of Thailand 3rd Dec 2018
New rubber price subsidy is 'unfair', says RNRF Bangkok Post 29th Nov 2018
Guideline prices for high-value lumber prioritised Bangkok Post 29th Nov 2018
Government to 'streamline' health funds Bangkok Post 13th Dec 2018
Vegetables and fruits in student lunches heavily contaminated with toxic chemicals Thai PBS World 13th Dec 2018
DDC urges parents to get their children vaccinated National News Bureau of Thailand 7th Dec 2018
Prawit orders clampdown as drugs worth Bt4.5 bn seized The Nation 5th Dec 2018
Public Health Ministry aims to end AIDS problem by 2030 Thai PBS World 3rd Dec 2018
DEPA offers tax deduction up to 200% for software purchases by SMEs National News Bureau of Thailand 13th Dec 2018
Thailand’s cyber security proposal approved Vietnam Plus 11th Dec 2018
E-commerce players up in arms over tax Bangkok Post 7th Dec 2018
700MHz auction postponed from February to 3rd quarter Bangkok Post 7th Dec 2018
Plan to shepherd 600,000 SMEs into e-commerce next year Bangkok Post 7th Dec 2018
NBTC begins relaxing auction payment process Bangkok Post 4th Dec 2018
Thailand Revenue Department to Track VAT Payments using Blockchain CCN 4th Dec 2018
Thailand’s SEC Clarifies How Laws Can Apply To Crypto Asset Securities BitcoinExchangeGuide 1st Dec 2018
Transport Minister updates on high-speed rail project National News Bureau of Thailand 13th Dec 2018
Thailand on track to develop into regional rail hub Nikkei Asian Review 7th Dec 2018
Investors flock to Thailand’s EEC project The ASEAN Post 4th Dec 2018
Commerce Ministry developing logistics support for online SMEs Bangkok Post 1st Dec 2018
Chinese Producers Fleeing Trade War Buoy Leading Thai Developer Bloomberg 1st Dec 2018
Why tourists are to blame for Phi Phi Islands’ water shortage South China Morning Post 12th Dec 2018
Airports of Thailand net profit up 22% in FY2018 CAPA - Centre for Aviation 5th Dec 2018
Tourism’s influence on Thai politics The ASEAN Post 4th Dec 2018
Chinese will be first to get access to Thai e-visa service Bangkok Post 3rd Dec 2018
Information Dept to debut 1st phase of E-visa project on December 3rd National News Bureau of Thailand 3rd Dec 2018
UNESCO lists Khon as an intangible cultural heritage of humanity Pattaya Mail 2nd Dec 2018