Government and institution measures in response to COVID-19.
Government and institution measures in response to COVID-19.
A fiscal package worth approximately 400 billion baht, consisting of soft loans worth 150 billion baht, debt payments extension, tax benefits including reduction of withholding taxes, was unveiled on March 10 providing support for households including reducing and delaying utility bills. A second-phase package could be introduced if the slowdown continues.
Tax measures – Direct and Indirect
(e.g. payment deferrals, rate reductions…)
Click here to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.
(e.g. state compensation schemes, training…)
- Cash support of THB 5,000 for 3 months starting Apr to Jun 2020 for labor, temporary workers, freelance not registered under Social Security System (SSS). Individuals under SSS will received 50% of previous salary (but not exceeding the maximum salary of THB 15,000 per month) if the employer temporary halt employment.
- Cash support of THB 5,000 for 3 months starting May to July 2020 for farmers
- Special loan of 10,000 per person, 0.1% interest rate, no collaterals needed
- Special loan of 50,000 per person, 0.35% interest rate, collaterals required
- Loans to government pawn shops to further boost liquidity for lower income citizens
- Grace period provided for principal payments and consideration for reduction in interest per customer for personal loans, hire purchase and leasing loans, house loans, SME loans, microfinance, and nanofinance. The details of relief measures and conditions vary depending on each bank/non-bank.
Measure to enhance skill for labor
- Seminar to enhance career skills or to arrange social activities
Social Security Contributions
- The Thai Ministry of Labor issued guidance with regard to social security relief measures in response to the coronavirus (COVID-19) pandemic. The relief measures include reduced rates for social security contributions and extension of time for submitting social security forms and for remitting social security contributions.
- The social security contribution rates (both the employer portion and the employee portion) are reduced to 4% for employers and 1% for employees or insured persons of each employee’s monthly salary but not exceeding the maximum salary of THB 15,000 for a three-month salary cycle from March to May 2020.
- The deadline for social security forms due for March 2020 is extended to 15 July 2020 (from 15 April 2020).
- The deadline for April 2020 is extended to 15 August 2020 (from 15 May 2020).
The deadline for May 2020 is extended to 15 September 2020 (from 15 June 2020).
Liquidity boosting for Entrepreneurs
- Soft loans not exceeding THB 3 mn per business, 3% interest rate for the first 2 years will be provided to affected SME entrepreneurs until 30 December 2020.
SME Loan Restructuring
- Pre-emptive measure against NPL through interest reduction and extensive payment period. This to avoid being classified as Troubled Debt Restructuring (TDR), Credit Bureau, and to be classified as ordinary loan
- Loan Restructuring for NPL to promote to ordinary loan when loans are restructured, with 3 consecutive instalments paid off (from 12 instalments)
- Measures to support FIs and SFIs in classification of liquidity loan as ordinary loan (ordinary T&C and lower interest rate)
- Measures to support FIs to maintain unused credit lines
- Financial Institutions to closely monitor and monthly report milestones according to the measures, including outstand loans for SMEs, 21 days after the end of each month
Adjustment in roles of Financial Institutions and Banks
- Encourage restructuring on performing loans to prevent NPLs
- Consider extending payment terms, including payment period and interest rate
- Adjust/terminate penalty charges
- Consider other supportive measures for SMEs using credit cards and personal loans for liquidity due to high interest burden
- Determine framework on loan restructuring with various debtors
Measures to adjust/lower fees structure
- Prepayment penalty charge for SME loan and personal loan
- Default payment on mortgage, SME loan, and personal loan
- ATM and debit card fees
Economic stimulus measures
(e.g. loans, moratorium on debt repayments…)
- Policy rate reduced by 0.25% from 1.25% to 1%“
- On March 22, announced a plan to ensure sufficient liquidity in the bond market by allowing commercial banks to use investment grade bonds as collateral to borrow from the central bank’s lending facility of over 1 trillion baht ($30 billion).
- On March 23: In an emergency meeting, policy rate has been further reduced by 0.25 basis points to a record low of 0.75%.
Measures on Credit card and small loans
- For commercial banks and SFIs: extend principal and interest payment for 3 months
- For other financial institutions, choose between: Extend principal and interest payment for 3 months or reduce instalment amount at least by 30% for 6 months
Measures on stabilization of bond market
Supportive liquidity for mutual funds (Mutual Fund Liquidity Facility):
- The Bank of Thailand will set up a specific mechanism which will ease liquidity to commercial banks that buy investment units of COVID-19-affected mutual funds in Money market fund and Daily fixed income fund, thought collateralization of investment units for liquidity. The Bank of Thailand will continue the mechanism so until the market turns as usual
Supportive capital market for affected businesses
- The Thai Bankers’ Association, Government Savings Bank, Insurance companies, and Government Pension Fund, together, will establish Corporate Bond Liquidity Stabilization Fund (BSF), amounting THB 70 to 100 bn, to inject liquidity via bond rollover
- Supportive measures to safeguard against Government bonds’ volatility
- The Bank of Thailand will execute measures to stabilize government bonds, ensuring smooth, effective, and liquid market
Measures regarding submission of information for public limited companies
- SEC to discuss with Federation of Accounting Professions for the relaxation in impairment rules for listed companies
- SEC has discussed with Department of Business Development for the relaxation on restrictions involving annual general meeting (AGM). SEC allows for AGM to be conducted online or committees may use delegation
- Listed companies and other issuers, which are affected by the epidemic of COVID-19 and could not delegate an auditor due to postponement of annual general meeting, may themselves delegate a SEC-approved auditor, whom shall audit the Q1/2020 of the companies and submit financial statements. However, the company shall submit the auditor for approval in the next AGM.
Measures regarding submission of financial statement for limited companies and partnerships
- Partnerships, limited companies and non-listed public limited companies can hold an AGM later than 4 months from the end of the accounting period and submit their financial statements within 1 month after the postponed AGM date (Additional submission of meeting-postponement letter required for limited and public limited companies)
The Government has released the relief measures to aid individuals and business operators affected by the outbreak of COVID-19. The Ministry of Finance expects to release further guidelines and conditions relating to these measures. Below is the outline of measures relating to excise tax and customs .
- The deadline for excise tax form filing and payment occurring during the period from 1 March 2020 to 31 May 2020 is extended to 15 July 2020 for operators of excisable entertainment businesses that are temporarily closed due to the COVID-19 outbreak. The excisable entertainment businesses that are subject to this relief measure include:
- Night clubs, discotheques, pubs, bars, cocktail lounges, including places that sell food and alcoholic beverages with music or other entertainment performances; and
- Bathhouses, spas, massage parlors, gambling places, such as racecourses, and golf courses.
- Deadline of excise payment is extended for petroleum and petroleum-related business operators from the 10th day to the 15th day of the month following the month that petroleum or petroleum products are brought out of the factory or bonded warehouse. The extension is applicable for excise tax liabilities occurring from 1 April 2020 to 30 June 2020.
- Tax relief measures for business operators
- Import duties on goods used for treatment, diagnosis or prevention of coronavirus infection (COVID-19) as per the list specified by the Ministry of Public Health will be exempt from the effective date of the Notification of the Ministry of Finance to 30 September 2020. The Notification is yet to be formally released.
- Jet fuel excise has been reduced from THB 4.726 per liter to THB 0.20 per liter for airlines operating domestic flights until 30 September 2020
Measures to ease the lockdown
- Shopping Malls, Restaurants and Sports in Thailand are back reopened with the limit of the number of users.
- State curfew was cancelled with an effect from 15 June 2020.
- Crowded places and international flights to Thailand are still prohibited
The government adopted measures to ease the restrictions concerning meetings of boards of directors and shareholder meetings in response to the coronavirus (COVID-19) pandemic.
- Due to the COVID-19 situation, the government removed certain limitations on electronic meetings (e-meetings), including a rule that had required that at least one-third of the quorum be present in the same location in Thailand.
- An emergency decree on electronic meetings replaces the prior rules, and removes certain limitations by allowing entities including companies (both private and public companies) to be able to hold virtual board of director and shareholder meetings without the physical attendance requirement from any location.
Other measures and sources
- Custom exemption for imported goods related to curing, diagnosis, or prevention of COVID-19 until 30 Sept 2020
Tax and fee ease measure for debt-restructuring participants
- PIT and CIT exemption for debtor for income resulted from debt paid
- PIT, CIT, VAT, SBT, and Stamp Duty for debtor and creditor on income resulted from asset transferred, asset sold, or service offered and other instruments for the purpose of debt restructuring
- PIT, CIT, SBT, and Stamp Duty for debtor on income resulted from immovable property transferred as a mortgage collateralized for creditor for others aside from the creditor, and other instruments associating with the transfer.
- Relax regulations relating to non performing loans written off by creditor.
Measures to ease the lockdown
- Restaurants, Sport, events, and international flights are closed until May 31st
Main sources of information
Tax: John Andes – email@example.com
Legal: Kullakattimas Benjamas – firstname.lastname@example.org