The Revenue Department has proposed that the current VAT of 7% and 20% corporate tax rate be continued for another year but awaits approval from both the Election Commission and the Cabinet. The EC needs to determine whether or not the tax cut extension will be deemed as breaching the Constitution. The old rate was set at 10% and 23%, the extension was due to expire this September 30 but the Revenue Department feels that an extension of the lowered rate will ease the burden on consumers and corporations. The Fiscal Economics Office has proposed that the old VAT rates of 10% and 23% be reintroduced as every one percent increase would generate 70-80 billion baht in revenue annually for the government. However, the Director – General believes that the increased VAT will increase hardship on consumers as prices go up, already consumers purchasing has been lowered due to political instability.

The Industrial Promotion Department has called on the private sector to tap into the ageing population by exploring possible products for the ageing for investment. Thailand is moving towards becoming an ageing society, with 9.9% of the 66 million people over the age of 65 already. By 2020 Thailand will be considered an “aged society” when the population of those over 65 will become 14.4% of the entire population. Thailand now ranks 2nd after Singapore for percentage of elderly citizens. Regionally, Southeast Asia has 5.89 % of the 36.9 million people older than 65.

The IDP suggests that SME businesses consider focusing on businesses that focus on the elderly such as processed food such as health food and beverages, and food supplements. The value of processed food in the domestic market is at least Bt100 billion per year. Other significant industries are furniture such as beds and rubber mattresses, lifestyle products such as organic and anti-ageing cosmetics, medical supplies and equipment such rubber gloves, lenses, canes and wheel chairs, and construction materials such as water faucets, doorknobs and bolts. The export value for these products is Bt200 billion per year according to the IDP.

Tourism in Thailand’s Southern region, especially Phuket, continues to remain strong according to the Thai Hotels Association (THA) Southern chapter, noting that the region has seen no significant changes due to political instability in Bangkok. In fact, many tourists have bypassed Bangkok to travel South and the occupancy rates in Phuket have reflected that, reaching a 60-70 occupancy rate for three- and four-star hotels, much higher than the same time last year. The THA has been working with tourism-related businesses in penetrating overseas markets by organizing road shows to Beijing, Shanghai and other Chinese cities late this month, and to Sapporo, Hokkaido of Japan in June.

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