The imposition of the financial transaction tax on share sales by individual investors might be delayed because of opposition from the Federation of Thai Capital Market Organizations (Fetco), says Finance Minister Arkhom Termpittayapaisith.
He said the Secretariat of the Cabinet recently sent back the draft law to the ministry for reconsideration following opposition from Fetco. This prompted the ministry to set up a team to consider Fetco's proposals for the law.
Mr Arkhom said he could not predict whether the law would come into force as expected by the middle of this year.
The law takes force after publication in the Royal Gazette. There is a 90-day grace period to give related parties time to comply with the law.
The draft law was approved by the cabinet last November, ending more than 30 years of waivers.
The tax has been on the books for more than 30 years, but the government has consistently waived it to support market development.
Earlier Fetco urged the Finance Ministry to abandon a proposal to collect a transaction tax from share trades, claiming the stock market still needs tax incentives to support long-term investment.
The collection comes under the Revenue Department's regulations, which require the payment of a 0.1% specific business tax on securities trades and a related local tax of 10% of the specific business tax, bringing the total financial transaction tax to 0.11% per share sold.
In the first year, the law requires payment of only a 0.05% specific business tax on securities trades and a related local tax of 10% of the specific business tax, bringing the tally to 0.055% per share sold.
A ministry source who requested anonymity said in addition to Fetco's opposition to the law, it is expected to be a political issue, causing a delay in implementation.
The source said as the general election draws near, the government might not want to introduce a tax that affects some voters.
