PwC Thailand has called for business and government leaders to adjust
the Thai taxation structure and outdated laws to stay competitive before the
implementation of the Asean Economic Community in 2015, as fast-emerging Asian
markets play a greater role in driving the world's economy.
State agencies, government
regulators and businesses must prepare themselves in several aspects for the
AEC, particularly by amending laws and regulations on tax-related issues that
hinder the country's competitiveness on trade and investment, said Sira
Intarakumthornchai, chief executive officer of PwC Thailand.
He made the remarks during
PricewaterhouseCoopers' 14th annual conference, titled "Maximise
Shareholder Value through Effective Tax Planning 2013". The theme was
"Thailand and the Emergence of Asia".
"Thai businesses could
confront a number of tax-related obstacles when exploring cross-border
opportunities in trade and investment if we were to enter the upcoming economic
integration unprepared," Sira said. "We [Thailand] must step up and
prepare ourselves for the forthcoming changes by studying thoroughly the
possible impacts of the AEC on Thai businesses to see how best we can thrive in
the new market environment."
The disparate policies in each
country must be aligned and standardised. Additionally, taxation structures in
some areas, such as capital gains tax and corporate income tax, would have to
be reformed to support Thai companies looking to make overseas investments, and
in return to attract more foreign businesses into the country, he said.
Thavorn Rujivanarom, tax lead
partner of PricewaterhouseCoopers Legal & Tax Consultants, said greater
economic integration under the AEC would not only bring opportunities for Thai
enterprises to benefit from a much bigger market with an approximate population
of 600 million, but also the threat of greater competition from neighbouring
countries.
"The Revenue Department has
prepared certain measures to support the forthcoming economic integration: a
tax-collection approach that will facilitate international trade and investment
between countries, ease the flow of funds and enhance labour mobility within
the region. However, it also needs to reform the tax structure properly to
improve Thailand's competitiveness," Thavorn said.
"At the same time, it has to
be able to accommodate foreign taxpayers and international businesses by
strengthening its cooperation with the tax authorities in each member country.
The government must also create some incentives to attract a greater inflow of
foreign investment and adopt a comprehensive approach to persuading these
foreign investors to keep their returns within Thailand."
Proficiency in English is another
area that is essential and needs to be developed if Thailand is to compete with
its neighbours effectively, he added.
DOING AWAY WITH OBSTACLES
The Kingdom's relatively high
taxation could degrade its attractiveness and deflect investment to competing
countries with lower or no taxation. The government has cut corporate income
tax from 30 per cent to 23 per cent this year, and will ultimately reduce it to
20 per cent in 2013, but that alone is not sufficient, Thavorn said.
He added that there must be a
revision of regulations that could present obstacles to investment in the
longer term.
Consideration should also be
given to Thailand's personal income tax rate of 37 per cent to limit the
disparity.
To accommodate the opening up of
the region, changes need to be made, particularly in the area of regulatory
redundancy involving licensing, customs procedures and double taxation, he
added.
Like its Asean counterparts, the
Thai government has gradually changed certain tax rules to cope with the
expansion of business and investment when the AEC comes into effect. However,
it has been considering adopting anti-tax-avoidance legislation to include the
issues of transfer pricing, thin capitalisation, foreign-controlled companies
and general anti-avoidance rules to protect the country from any abusive tax
scheme, he said.
As for those looking for business
opportunities in neighbouring countries such as Myanmar and Laos, Thavorn said
that despite the enormous potential, investors must understand the implications
of tax rules and foreign investment laws, tax regimes and incentives, and in
essence beware of unforeseeable risks.
Business & Investment Opportunities
YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Healthcare and Life Science with expertise in ASEAN. Since we are currently changing the platform of www.yourvietnamexpert.com, you may contact us at: sbc.pte@gmail.com, provisionally. Many thanks.
No comments:
Post a Comment