ONE-OFF PERK

Fetco promotes temporary tax break

Fetco promotes a one-time spin-off investment incentive for equity investment with a tax privilege.

A one-time spin-off investment incentive for equity investment with a tax privilege is ideal for shoring up bruised sentiment and supporting Thailand’s stock market recovery, says a capital market veteran.

The thinking is that the temporary one-time investment measure offered by the Finance Ministry would be separate from the Super Savings Fund (SSF), though details have not been released yet, said Paiboon Nalinthrangkurn, chairman of the Federation of Thai Capital Market Organizations.

The tax privilege for the investment incentive should be limited to units bought by the end of the second quarter to spur an acceleration of capital into the system, Mr Paiboon said.

The move could shore up investor sentiment about Thai equities and lend support as the Stock Exchange of Thailand index tries to recover its fundamentals, he said.

A package designed as an emergency relief measure covering all sectors is scheduled for cabinet approval today.

Earlier, Mr Paiboon opined that the Finance Ministry should consider reversing its decision to end the tax privilege on long-term equity funds (LTFs) as a way to rev up long-term investment capital and stabilise Thailand’s stock market condition.

The bourse has been battered by recent sell-offs stemming from the coronavirus epidemic.

Narongsak Plomechai, chief executive of SCB Asset Management, said long-term investors help strengthen

The tax privilege for the investment incentive should be limited to units purchased by the end of the second quarter. PAIBOON NALINTHRANGKURN Chairman, Federation of Thai Capital Market Organizations

the capital market in many aspects, but long-term savers also play a role.

Finance Minister Uttama Savanayana said on Wednesday that the Finance Ministry and Fetco had agreed to revise the investment conditions for SSFs to make them more similar to the dissolved LTFs.

The changes, however, would be temporary and effective for one year, Mr Uttama said.

In December 2019, the cabinet approved the SSF as a new tax-saving fund to replace LTFs, whose tax incentive lapsed at the end of 2019.

SSF investment conditions are more relaxed than those for LTFs, as SSF units can invest in any assets, while LTFs stipulate equities as the major investment asset.

The tax-deductible amount for SSFs is capped at 30% of annual income or 500,000 baht a year as a combined amount for contributions to the new tax-saving fund, retirement mutual funds, provident funds, the Government Pension Fund, the National Savings Fund and pension insurance premiums.