The business community was given a reprieve earlier today when the Thai cabinet signed off on tax relief proposals aimed at helping small and medium sized enterprises (SMEs) negatively affected by the newly enacted THB300 daily minimum wage. Recent statistics released by the Thailand Labor Protection and Welfare Department suggest that the new minimum wage law has cost the Thai economy over 3,400 jobs since it was implemented in seven provinces six months ago. The law took countrywide effect on Jan. 1 of this year.
The measures, proposed by the Finance Ministry in response to pressure from the private sector, will help SMEs with annual revenues of THB50 million or less by raising the income tax exemption limit from THB150,000 to THB300,000. SMEs with declared incomes of THB300,000 to THB1,000,000 are to be taxed at 15% while those over THB1,000,000 are to be taxed at 20%.
Additionally, the withholding tax on SMEs is to be cut from 3% to 2%.
According to the Bangkok Post, it is estimated that these measures will reduce tax revenue by roughly THB2.8 billion.
