Brokerages back dividend tax exemption
The proposal came after the tax-deductible Thai ESG Extra (ESG X) Fund designed to stimulate long-term investment through the Stock Exchange of Thailand (SET) raised only 30 billion baht, falling short of the government's target of 100 billion baht.
Paiboon Nalinthrangkurn, chief executive of Tisco Securities, said a lack of investor confidence amid domestic and global volatility may have been a key factor in the fund's underperformance.
While Thailand's broader market appears weak, stocks in the SET High Dividend Index (SETHD) offer a 6.1% yield, one of the highest globally, he said.
One idea is to exempt dividend tax for investments held longer than one year and allow investors to switch between securities without triggering capital gains, similar to that offered under Japan's Nippon Individual Savings Account programme, Mr Paiboon noted.
"If we address the core issue with the right tools, we can rebuild confidence. High-dividend stocks are typically strong, stable companies with consistent earnings. Those are ideal for long-term investment," he told a forum co-hosted by the Federation of Thai Capital Market Organizations (Fetco) and the Thai Bond Market Association (ThaiBMA).
In the worst-case scenario of the US's reciprocal tariff, Mr Paiboon said the Investment Analysts Association expects the SET index to find resistance at around 1,231 points, after previously bottoming out at 1,060.
Chayanon Rakkanjanan, co-founder and chief executive of Finnomena, echoed these concerns, saying 2025 is the worst year for the Thai stock market.
"Confidence in Thailand's capital markets remains fragile, pushing many investors to seek opportunities abroad. However, if the government implements serious economic stimulus and restores political stability, investor sentiment could recover," he said.
He agreed that tax incentives for SETHD would make long-term investment more attractive.
Fetco chairman Kobsak Pootrakool said US President Donald Trump is highly likely to proceed with the proposed reciprocal tariff.
US businesses were given a 90-day grace period with only a 10% tariff, allowing them to stockpile inventory and seek non-Chinese suppliers. For US citizens, the US Congress has passed the "One Big Beautiful Bill", offering tax relief to offset rising import costs.
Since early 2025, the US has already collected about US$100 billion in tariffs and the amount is projected to top $300 billion by year-end.
This revenue is expected to help reduce the fiscal deficit and fund tax cuts for US households, making it politically difficult to reverse course, said Mr Kobsak, who is also executive vice-president of Bangkok Bank.
"The private sector would find it acceptable if the US lowers import tariffs for Thailand to 25% from the proposed 36%," he said, suggesting the government allocate a budget to assist businesses affected by the tariffs as well as other measures to protect the agricultural sector and farmers.
"Aug 1 will mark the beginning of a new global tariff regime, with country-specific rates to be announced. The changes will reshape global trade flows, affecting Thai exports and industries."
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