Apisak holds firm on SME single accounts

Scheme to lead to developed nation status

Finance Minister Apisak Tantivorawong has insisted implementation of a new lending practice under the single financial scheme for small and medium-sized enterprises (SMEs) will remain on track for the beginning of next year.

The Finance Ministry has given SMEs two years to prepare, so they should be ready to comply with the new lending practice, he said.

“We implemented the measure two years ago. We even offered SMEs an exemption from backdated tax probes, but some still turned a blind eye. They would continue to ignore the measure if it was delayed further, so it is our duty to do this if we want our country to become a developed nation,” said Mr Apisak.

Under the single account scheme, the central bank requires banks to consider only financial statements submitted to the Revenue Department when considering SME loans, starting from Jan 1, 2019.

But the requirement has raised concerns it will lessen access to finance for most SMEs, which tend to use more than one financial account and submit the one with the least value to understate or avoid tax, while turning in another for loan applications.

The central bank will reportedly stick to its Jan 1, 2019 deadline of requiring banks to use financial accounts submitted by SMEs to the Revenue Department for loan approval, but it may offer a three-year grace period for full compliance.

According to a recent survey by the University of the Thai Chamber of Commerce of 1,200 SMEs, 57.5% regularly produce financial accounts, 33.1% periodically make financial accounts, and 9.4% never do.

Mr Apisak said the ministry would allow SMEs to submit financial accounts arranged by an easy programme provided by the Federation of Accounting Professions.

The Revenue Department also plays a role as a mentor to advise SMEs on reporting financial accounts correctly, rather than only acting as an inspector, he said. That approach has attracted several SMEs to enter the tax system.

Take Thong Fah Pracha Rat shops as an example. The Revenue Department suggested such shops with annual sales of 1.8 million baht and above sign up for the value-added tax system.

“Those that haven’t complied with the law, let’s correct it. Arranging financial accounts correctly isn’t difficult, and it allows the department to examine them. When SMEs have trouble with their accounts, the department will provide them advice,” said Mr Apisak.