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Bangkok Post
14-07-2025
- Business
- Bangkok Post
Brokerages back dividend tax exemption
Brokerage firms are urging the Ministry of Finance to exempt dividend tax for stock investment to help revive investors' interest in the Thai market, which has declined by more than 20% year to date. 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."
Bangkok Post
10-07-2025
- Business
- Bangkok Post
Call for joint Asean team to negotiate with US over tariffs
Former finance minister Korn Chatikavanij wants the Thai government to urgently form a joint Asean negotiation team to engage with the US on reducing proposed tariffs, including a 36% rate on Thai goods set to take effect on Aug 1. Mr Korn, chairman of wealth management platform Finnomena, described the 36% tariff as the worst-case scenario for trade negotiations, as it was US President Donald Trump's initial tariff rate for Thailand back in April. The steep tariffs pose serious risks to Thailand's economic stability, financial markets and global competitiveness, he said. Mr Korn also called for a restructuring of the 2026 national budget to compensate sectors affected by the tariffs. He emphasised the need for transparency, urging the government to clearly explain any industry liberalisation decisions made in exchange for tariff reductions so that affected businesses are fully informed and can prepare accordingly. "If Thailand is forced to eliminate import tariffs on all US goods across all industries in exchange for tariff reductions, the government must also allocate budget support for the industries and workers affected by these concessions," said Mr Korn. He cautioned that even if Thailand eliminates its import tariffs on US goods, as Vietnam did, there is no guarantee the US will offer equivalent tariff reductions. Washington may view Vietnam as a more favourable production base with a more business-friendly environment, said Mr Korn. "If Thailand does nothing, it risks losing foreign direct investment, a decline in exports, and worsening GDP, on top of ongoing political instability," he said. Mr Korn suggested trade talks be conducted proactively, in collaboration with Asean nations, and raised through platforms such as the World Trade Organization to strengthen regional bargaining power, expand trade cooperation, and reach a sustainable resolution. "It's nearly impossible for every party to walk away with a win. There will inevitably be trade-offs, so the public deserves full disclosure," he said. Wasin Parithan, managing director of Definit Co, an investment advisory firm under Finnomena Group, said high US tariffs would weigh on affected countries in the short term by slowing economic growth and adding volatility to the stock market. Chayanon Rakkanjanan, co-founder and chief executive of Finnomena, said he believes the Stock Exchange of Thailand (SET) index is unlikely to fall below 1,000 points, with resistance expected at 1,350 points. Mr Chayanon said investors should consider holding 50% in equities, with 25% in US stocks and 25% in emerging markets excluding China. Roughly 40% should be allocated to bonds, of which 30% should be in global bonds and 10% in Thai fixed income. The remaining allocation is for alternative assets, such as high-dividend Thai stocks like the SETHD index and gold, which remains a top performer.
