Thailand considers tax on stock transactions

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The Thai government is considering imposing a tax on sales of shares on the national stock exchange in an attempt to generate additional income, according to a Reuters report.

Plans to remove a tax exemption on sales of securities traded on the Stock Exchange of Thailand (SET), in place since 1991, are currently under consideration, two sources said in the news wire.

If the plans are implemented, a 0.11% share sales tax would be imposed on investors who trade above THB 1 million ($ 31,100) per month.

Badly handled finances

In principle, the idea is similar to the financial transaction tax, which is currently applied in both the Indian and Taiwanese stock markets.

The idea was raised as part of an overhaul of the country’s tax system as the government seeks to increase revenues in the face of the ongoing COVID-19 pandemic, which has ravaged the finances of the tourism dependent country.

If the plan is implemented, it would build on the existing framework which provides for a capital gains tax applied to profits made by national and international investors – but which is currently not applied to individuals.

Taiwan tax

Taiwan Financial Transaction Tax is levied on several financial instruments and currently stands at 0.3% of the total transaction value for stocks.

According to a 2010 study by the US stock exchange group CME, when Taiwan introduced a transaction tax on its derivatives market in 1993, total volumes fell sharply as companies moved to Singapore’s SGX. When the Taiwanese authorities reduced the tax by 80%, volumes in the local futures market increased by 300%.

Neither SET nor the Thai government responded to Reuters’ request for comment.

Read more: Thai regulators file criminal complaint against Binance

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