Reduced Payments for Social Security

29 April 2009

The Labour Ministry yesterday announced a reduction in social security payments for both employers and employees from 5 percent to 3 percent beginning on July 1. This measure is aimed at offsetting the cost burden to 350,000 ailing businesses in the Kingdom, thereby preventing the layoffs of a large number of workers and closure of businesses. The Social Security Office will subsidize the reductions in revenue of 15 billion Baht for losses in the first year. At present, it is not known how long this measure will be in place.

Cabinet Approve Measures for Tourism

29 April 2009

The Cabinet yesterday endorsed three measures to aid in the recuperation of the sluggish tourism industry. Government funding for this assistance could reach 15 billion Baht.

The three measures include the following: (1) insurance coverage for tourists visiting Thailand from May to October of 200 million baht, (2) a loan extension from the Small and Medium Enterprise Development Bank (SME bank) of 5 billion Baht, and (3) a loan guarantee from the Small Business Credit Guarantee Corp (SBCG) to finance corporate tax payments of tourism operators.

Insurance coverage for tourists would entitle tourists to a maximum compensation of 10,000 USD (355,000 baht) in the event they are adversely affected by political upheaval while they are visiting Thailand. This measure would cover 5 million tourists and be effective for a six-month period, from May to October.

Tourism operators will be entitled to borrow 5 million Baht per borrower from the SME Bank with interest rates of 4 percent per year, and they will be allowed a grace period of one year. This provision would assist tour companies, hotel operators, and others associated with the tourism industry who have been negatively affected by the economic slump. The deadline for loan applications submitted to the SME is July 31.

The Finance Minister has stated that loans received from the SBCG to finance tax payments for tourism operators would be fully insured by the SBCG. Moreover, a grace period of three months would be provided borrowers, although borrowers would be charged 4 percent interest per year.

Thailand – India Free Trade Agreement

27 April 2009

Thailand and India are to sign a free trade agreement which could increase bilateral trade to $10 billion a year by July of this year. The agreement would add items to the Early Harvest scheme established since 1 September 2006 under the Thailand-India free trade agreement. The scheme lowered tariffs for 82 farm and industrial items to zero and increased bilateral trade between the two countries to $6.04 billion in 2008, up by 19 percent compared to 2007.

Exports receiving these tariff benefits include polycarbonates, aluminium alloy, air conditioners, precious metals, jewellery and colour television sets.

Negotiations are ongoing to resolve sensitive issues concerning agriculture, steel, copper and petrochemicals.

Related Documents: Law Database: Free Trade Agreements

Draft Retail and Wholesale Business Law

24 April 2009

The Commerce Ministry will submit the revised draft retail and wholesale business bill to Cabinet in July in hopes that it will be passed during this current administration, according to the Deputy Commerce Minister. The draft is aimed to ensure fair regulations for both large and small retailers, and the survival and expansion of small retailers.

The Ministry’s committee to redraft the bill included small and large retailers, consumers and suppliers. Furthermore, retail laws of other countries have been referred to. Hence, the Commerce Ministry is of the opinion that the draft should be acceptable to Cabinet and Parliament as the draft was “thought through” and fair to all parties.