STOCKS / PUBLIC OFFERING PROMOTION

Corporate tax cuts for new listings revived

NUNTAWUN POLKUAMDEE

The cabinet is expected to approve new tax incentives for newly listed companies next week. Under the plan, newly listed companies on the Stock Exchange of Thailand this year will qualify for a special corporate tax rate of 25% for three accounting years. Companies joining the Market for Alternative Investment will receive a special rate of 20% for three years, compared with the normal corporate rate of 30%.

Somchai Sujjapongse, the deputy director-general of the Fiscal Policy Office, said the tax incentive was aimed at encouraging companies to list on the equity market. The new policy is similar to an earlier measure, which expired last year and was developed by the Thaksin Shinawatra government to stimulate the market.

MAI president Chanitr Charnchainarong said the tax deduction would encourage new listings on both stock markets.

He said that for the MAI, at least four companies were already planning to list thanks in part to the tax advantages offered under the new programme.

Dr Somchai said the capital markets should also benefit this year from stable economic growth of 4.5% to 5%, compared with 5.1% last year, despite the prevailing political and economic uncertainties.

The Finance Ministry plans several new initiatives to help spur economic growth and improve competitiveness, including import tax reductions for materials used in the automotive and food industries.

New infrastructure megaprojects and state investment programmes will begin over the next several months, including work on five new Bangkok mass-transit routes and construction on new low-cost housing units under the Baan Ua-arthorn and Baan Munkong programmes.

The two programmes aim to build 400,000 housing units nationwide. The government has budgeted 5.68 billion baht for the 30-billion-baht programme, with the remainder to be funded through loans from the National Housing Authority.

Dr Somchai said declining inflationary pressures would also help growth. Inflation this year is projected at 2.1% to 3.1%, down from 4.7% last year, thanks to falling global oil prices.

Lower inflation in turn will help lead to falling interest rates, he said, adding that export growth is projected at 10% to 12% based on exchange rates of around 36.5 baht to the dollar.

He said the 2007 budget deficit, projected at 146 billion baht, would help stimulate growth through higher state spending.

Thailand News : Business News
Bangkok Post
Friday January 26, 2007