Govt tax measures likely to drive GDP growth to 2.5-3%


Dr.Thanavath (Photo by: TNA)
Dr.Thanavath (Photo by: TNA)

The Center for Economic and Business Forecasting (CEBF), University of Thai Chamber of Commerce, said the new government tax measures should be able to drive Thailand’s economy to grow 2.5-3 percent this year.

Dr.Thanavath Phonvichai, director of the CEBF, today said he believed many parties would agree to the latest stimulus measures approved by the Cabinet yesterday because these measures have been focused on tax restructuring in the property sector, assisting small and medium enterprises (SMEs) and those tourism-related businesses.
The CEBF director, who is also the dean of the university’s School of Economics, said the implementation of such measures would help boost the country’s economy, which has been predicted to shrink in the first quarter of this year, as well as lifting the sentiment in the private sector.

Although the government is expected to lose as much as 40 billion baht in revenue from its tax measures, he said, it would be worthwhile if the money saved by these tax breaks would directly benefit the related businesses.
The measures should make the Thai economy pick up in the second and third quarters and grow another 0.5-1 percent for the entire year, he added.

Meanwhile, Atip Bijanonda, deputy managing director of Supalai Plc and president of the Thai Condominium Association, said the government measures for the real estate sector will help encourage people to decide to buy houses without any delay since the homebuyers could save money on both the ownership transfer and mortgage fees, in addition to getting the principal and interest deducted from taxes.
He said he believed the property sector will grow close to that of last year with total sales of around 70,000 units.

However, the private sector today urged the government to lower both corporate and personal income taxes while the tourism industry asked for an additional budget of 30 billion baht aimed at restoring business lost during months of political turmoil last year.
The requests were made during a Joint Public/Private Consultative Committee meeting, chaired by Prime Minister Abhisit Vejjajiva, for the government to lower personal income tax through an increase in the amount of tax reprieve to 200,000 baht from the current 150,000 baht and the corporate tax to 20-25 percent from the current 30 percent.

In addition, the Tourism Council of Thailand has requested for a special budget of 30 billion baht to be used in organising seminars and promoting tourist destinations.