The new Eastern Economic Corridor visa breaks new ground by stipulating a specific zone.
Newly added to the range of longstay visas comes the Eastern Economic Corridor (EEC) option for foreign investors in three eastern provinces which include Chonburi. The EEC visa, which allows multiple entries, offers automatic work permit procedures for targeted industries, and a discounted rate of 17 percent income tax for specialists, executives, professionals and (if necessary) dependants.
The EEC visa duration is actually linked to the life of the holder's work permit and is considered an investor type. There is obviously overlap with LTR which, however, is not linked to certain provinces and is much broader covering wealthy retirees, digital nomads with contracts and world travellers as well as executives. The benefits are similar – reduced income tax, avoidance of 90 days reporting and airport perks – but the EEC visa is specifically linked geographically to investment in high-tech industries and sunrise initiatives such as robotics, petrochemical, healthcare, tourism and biotechnology.
In recent years, Thailand has diversified its longstay visa regulations to encourage the overseas wealthy to make a base here. These include the Elite visa introduced in 2003, which has had a controversial history, the O/X 10 year visa for retirees from 2016 (not popular because of its bureaucracy) and the Long Term Residence started last year. The new EEC visa also illustrates the growing involvement of government agencies such as the Board of Investment, in addition to the immigration bureau, in the granting of longstay visas.
European Union trade and cooperation pact with Thailand to be finalised this year. It will include visa-free access for Thai passport holders. Prime Minister Srettha Thavisin plans to visit France and Italy next week as the kingdom cements closer ties with the bloc.
The government is confident that a new trade and cooperation framework will be unveiled this year with the European Union. Among the provisions will be visa-free access to the Schengen zone for Thai passport holders. It will also include a free trade agreement, which will boost Thailand's efforts to attract inward investment. The news comes ahead of Prime Minister Srettha Thavisin's visit to France and Italy this week.
On Wednesday, Prime Minister's Office Minister Jakkapong Sangmanee announced that Thailand hoped to finalise a free trade pact with the European Union this year.
Talks with the 27-member bloc commenced in September in Brussels. Afterwards, the second leg of the talks was held in Bangkok in January 2024. The final stage of talks is due to take place within the European Union in June.
Minister Jakkapong was formerly deputy minister at the Ministry of Foreign Affairs before the end of April cabinet reshuffle.
Thailand-EU Comprehensive Partnership and Cooperation pact to include a provision for Thai nationals to enjoy visa-free access to the EU Schengen zone
In addition to the trade aspect, the minister talked of Thailand ratifying a Thailand-EU Comprehensive Partnership and Cooperation Agreement this year. Part of this pact will be the green light for Thai passport holders to access the Schengen zone without a visa.
The Schengen zone includes 26 European Union countries and Iceland. In particular, it excludes Ireland which has a Common Travel Area with the United Kingdom.
'The FTA will not only stimulate economic growth in both regions but also benefit their businesses and supply chain,' Minister Jakkapong explained. He was attending an event organised by the European Union in Thailand to mark Europe Day on May 9th.
'To allow more convenient people-to-people connectivity, Thailand hopes for support from the EU to allow Thai nationals to enter the Schengen zone without the visa requirement.'
Thailand needs European Union access to compete for investment with Vietnam. Lack of access to the key market has impeded the kingdom's efforts since 2020
In addition, a free trade pact and easier access to the European Union market will help Thailand attract inward investment. Since the 2020 pact between the European Union and Vietnam, Thailand has been at a disadvantage against its key competitor for inward investment.
The news came at the event last Wednesday, in Bangkok at the Conrad Hotel.
Mr David Daly, the European Union ambassador to Thailand, addressed a business and diplomatic gathering. In short, it was to celebrate Europe Day. At length, he explained the background to the occasion.
It was to celebrate 74 years since the Schuman Declaration. This was issued by the French Minister of Foreign Affairs Robert Schuman, on May 9th, 1950.
In short, it was an agreement among the founders of the European Coal and Steel Community. The members of the 6 nation alliance agreed to work together and pool resources in relation to coal and steel production.
The founding countries were France, West Germany, Italy, Netherlands, Belgium and Luxembourg. Afterwards, the European Economic Community emerged and expanded from this alliance in 1957.
In turn, this entity grew and changed its name to become the 27-member European Union bloc today.
Bilateral trade between European Union and Thailand worth €1 billion a week or ฿39.7 billion
On Wednesday, Mr Daly revealed that bilateral trade between Thailand and the European Union now amounted to €1 billion a week or ฿39.7 billion. He is confident that a new free trade pact will certainly boost this figure.
At the same time, the European Union bloc is also, at this time, Thailand's third-largest source of inbound investment. In short, the 27-member bloc has created over 160,000 jobs in Thailand.
In addition, it is the kingdom's second most important tourism market after China.
The European Union ambassador especially praised Thailand's diplomatic efforts to bring peace to Myanmar. He also praised the kingdom's ongoing campaign to prevent illegal fishing and stamp out labour abuses within the industry.
Prime Minister set to visit Europe on a 6-day trip
The news comes ahead of a 6-day visit to Europe this week from May 15thto 21st by Prime Minister Srettha Thavisin. The focus of the PM's visit will be France and Italy.
On a previous trip in March, Mr Srettha developed a strong rapport with French President Emmanuel Macron. On this trip, the French leader will convene the Thailand-France Business Forum.
The Thai leader will promote the government's 'Ignite Thailand 2025' initiative in both countries.
Later in May, Mr Srettha will again visit Japan to meet key business leaders and participate in the Nikkei Forum.
That visit will be from May 22nd to 24th. This is a speaking forum which will be held this year in Tokyo. The theme will be 'Asian leadership in an uncertain world'.
The Prime Minister is expected to meet many key business leaders and industrialists.
'It is a good opportunity to encourage further investment in Thailand,' Mr. Srettha explained to his followers on the social media site X.
Thailand's recent decision to reclassify cannabis as a narcotic, led by Prime Minister Srettha Thavisin, has sparked widespread outrage, threatening to ignite street protests and cause a flurry of lawsuits brought by an industry built on the promise of decriminalisation.
Two years ago, Thailand decriminalised cannabis, classing it as a 'controlled herb' and leaving its recreational use unrestricted. The move spurred the creation of almost 8000 dispensaries dotting every corner of the country. Yet, these shop owners now face the spectre of complete re-criminalisation with Thavisin's order to redraw cannabis as a 'category five' narcotic.
This change would redefine the mere act of "production, sale, import, export, or possession" of cannabis as a criminal offence under Thai drug law. Medical use would remain legal.
Thailand's burgeoning cannabis market, promoted as a boost for agricultural growth and wellness tourism, stands aghast. Advocacy group, 'Writing Thailand's Cannabis Future', has called for a protest in Bangkok on May 16 whilst dispensary owners pledge legal action. Rattapon Sanrak, owner of Highland Cafe, sternly noted: "We're all doing everything by the book but then suddenly the book is going to change."
The pubic U-turn reflects the ruling Pheu Thai Party's aggressive anti-drug stance. Recently, Thavisin set law enforcement and local authorities a 90-day deadline to crack down on drugs in 25 identified 'red zones'. Political rival Bhumjaithai Party have challenged this strategy, espousing a regulatory approach over further criminalisation.
The seesaw of cannabis policy, from decriminalisation to the looming threat of re-criminalisation, seems set to harm Thailand's nascent cannabis industry struggling under legal uncertainties.
The potential penalties for possession of cannabis post-reclassification are severe, with possible imprisonment of up to 15 years and fines reaching 1.5 million baht ($40,600). Industry insiders fear the move will damage foreign investor confidence, cripple the industry, and plunge cannabis distribution back into the shadowy reaches of Thailand's underworld.
They are urging health authorities to use science and facts to compare the effects of cannabis to those of alcohol and tobacco, and base their drug classification decisions on such comparisons.
Rattapon of Highland Cafe warns: "Instead of regulating the industry properly, you're choosing to close it up and make it worse by pushing it underground." With over a million households registered to plant cannabis, the stakes are high and consequences could be game-changing.
Thailand is set to implement stringent new compliance regulations for customers opening bank accounts, in response to a sharp rise in the misuse of these accounts for illicit or fraudulent activities. From November last year through the present, Thai authorities have closed over 300,000 "mule" accounts.
These regulations, as promulgated by the Bank of Thailand, the Anti-Money Laundering Office (AMLO), the Securities and Exchange Commission, and the anti-online scam centre AOC 1441, are poised to take effect by June 1st, as confirmed by Prasert Jantararuangtong, Minister of Digital Economy and Society. All banks will now be required to strictly adhere to a Customer Due Diligence (CDD) approach.
Local experts from the Thai authorities estimate that accounts exploited for offences could tally up to one million. Growing compliance in the digital banking sector has been encouraged due to the sustained efforts of financial institutions and related government initiatives.
The digital banking market in Thailand is projected to grow by 8.69% between 2024 and 2028, as per Statista research. This growth trajectory is likely to be aligned with a surge in compliance-related efforts, aimed at meeting regulatory mandates and safeguarding against financial crimes.
The Thai banking sector, a historical pillar of the nation's economy, has been undergoing a significant transformation. McKinsey's findings suggest a potential regain of regional clout, with a shift towards digital banking that necessitates a robust compliance framework to ensure transactional integrity.
In closing, Thailand's digital banking sector's compliance industry is witnessing dynamic changes driven by regulatory strides, technology, and a commitment to enhancing the digital banking experience. As the sector evolves, compliance will form a foundational anchor, ensuring a secure, sustainable digital banking revolution, tuned with international best practices.
These changes offer both opportunities and challenges to compliance professionals, who shall remain at the forefront of shielding the financial ecosystem from emerging risks.
Babies and young children are often at the greatest risk of heat-related mortality
BANGKOK, 8 May 2024 –Rain has finally brought relief to Thailand, but the country is still recovering from the record-breaking heatwave that gripped Southeast Asia throughout April and early May. Three dozen districts across Thailand's 77 provinces saw record temperatures in April, with 26 provinces suffering from heat soaring over 40 degrees Celsius.
Extreme temperatures pose critical challenges to children in Thailand and elsewhere, limiting outdoor activities, increasing their reliance on cooling methods and disrupting education. Simultaneously, changing weather conditions including unexpected storms can cause damage to homes and infrastructure and prevent many children from accessing basic services.
Heatwaves – whichare made more likely by climate change – present a serious health threat to children, who struggle more than adults to regulate their body temperature. Greater exposure to heatwaves raises the risk of various health issues such as chronic respiratory conditions, asthma, and cardiovascular diseases. Babies and young children are at greatest risk of heat-related mortality.
UNICEF's recent reports underscore the gravity of the situation, revealing that millions of children worldwide are already grappling with the effects of rising temperatures, a number projected to soar in the coming decades.
In Thailand, the situation is particularly alarming, with a significant majority of children experiencing the harsh realities of frequent heatwaves. Over 75 percent of children—approximately 10.3 million—were affected by high heat factors in 2020 alone, the report said. Without intervention, it's forecast that every Thai child under 18 will face more frequent and prolonged heatwaves by 2050.
Another climate-related report conducted by the Thailand Development Research Institute and UNICEF released last year pointed out that children in Thailand are at a high risk of climate change including high temperatures, flood and drought. Children living in Ubon Ratchathani, Nakhon Rachasima, Sri Saket, Nakhon Srithammarat and Narathiwat are at highest risk.
Experts in Thailand also pointed out that severe climate change will lead to declining agriculture yields with farmers and their families among the most vulnerable victims from climate crisis.
Despite these alarming statistics, the voices of these children have often gone unheard. Children are missing out on climate discussion and action. They are being recognized as vulnerable groups rather than active citizen or agents of change.
"Heatwaves have become significant challenges lately. With temperatures exceeding 40 degrees Celsius for several weeks, being in the sun has become nearly impossible. This situation is particularly challenging for young children, as they are unable to engage in outdoor activities," said Kwanjira Jaikla, 18, a member of the UNICEF Young People Advisory Board from Roi Et Province. "While I acknowledge the current efforts being made to tackle this issue, I hope to see more urgent actions in addressing climate change impacts on children.I also hope that adults include children and young people in climate actions, given their role in our daily lives."
Just 2.4 per cent of major global climate funds are allocated towards initiatives that address children's needs, according to a 2023 study — Falling short: addressing the climate finance gapfor children conducted by members of the Children's Environmental Rights Initiative (CERI) coalition; Plan International, Save the Children, and UNICEF.
This neglect not only perpetuates their vulnerability but also silences their voices in critical climate discussions.
"As we confront the reality of a boiling world, it is imperative that governments, communities, and individuals alike work together to ensure the world we all live in is a livable one," said Kyungsun Kim, UNICEF Representative for Thailand. "By prioritizing investments in climate-resilient infrastructure and climate-smart basic services, promoting sustainable practices, and amplifying the voices of children in decision-making processes, we can create a future where they can thrive in safety and security."
The challenges posed by heatwaves are just one facet of the broader climate crisis facing our planet, said Kim. "As we navigate this uncertain terrain, let us not forget our responsibility to safeguard the well-being of future generations. We must work towards a sustainable future for every child, ensuring that they inherit a world that is resilient to the challenges of a changing climate."Kim said.
The preceding is a press release published with full permission and authorization by the organization(s) listed in the PR material and TPN media. The statements, thoughts, and opinions of the organization involved in the press release are entirely their own and may not necessarily represent those of TPN media and its staff.
Thai government to reclassify cannabis as narcotic
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In a reversal of the previous administration's policy to decriminalise cannabis and hemp, the Pheu Thai-led government has decided to reclassify cannabis as a Category 5 narcotic, with the exception of medical and health uses.
Public Health ministry was instructed by Prime Minister Srettha Thavisin to amend its ministerial regulations to include cannabis on the list of Category 5 narcotics, to be completed for enforcement within this year.
There is an exception for the controlled use of cannabis for medical and health purposes, but not for recreational use.
This reversal of policy is a slap in the face for the Bhumjaithai party, one of the government's coalition partners, which promoted decriminalisation of cannabis and hemp as its flagship policy during the Prayut administration, leading to widespread cultivation of cannabis and the emergence of many cannabis retail outlets.
The prime minister held a meeting today with agencies involved in illegal narcotic suppression and control, including the Public Health, Justice and Interior ministries, as well as national security agencies.
Another key issue raised by the prime minister is the law concerning methamphetamine, or "yaa baa". He said that the current law does not specify the number of pills that can be considered possession for personal consumption or for trafficking, making it difficult for law enforcement to know whether to treat a suspect as a drug user or a drug dealer.
To clear up the confusion, the prime minister said that the law must be rewritten to make clear that possessing one meth pill will be considered for personal consumption and two or more pills will be regarded as possession for trafficking purposes.
Despite escalating efforts to crack down on illegal narcotics and the government's decision to add the problem to the national agenda, the prime minister said that more illegal narcotics, meth pills in particular, continue to be smuggled into the country and remain readily available.
Srettha said that one issue behind the failure to stem the inflow and widespread availability of meth pills is that authorities are still unable to crack down on major dealers, as he urged authorities concerned to intensify their efforts to close down the "big fish" and to seize their assets.
Address reporting for expats every three months is sometimes easier said than done.
Dear Editor, It's a chaotic situation, folks, which varies person to person! 10 reasons why your online 90 days reporting fails 1. You have been abroad since your last report. 2. You haven't completed a TM30 form for two years or so (even if you haven't left Thailand). 3. You have recently changed, or even renewed, your visa or permission. 4. It's your first time reporting 90 days. 5. You haven't put your room or apartment number on the form. 6. You were one day early or one day late. 7. You have changed your passport. 8. Your browser is not Google Chrome or Mozilla Firefox. 9. You haven't updated your permission to stay date. 10. You give up after your fourth attempt. Yours faithfully, Ken Thomas
Thailand's capital city of Bangkok remains the most popular tourist destination in March, 2024, followed by Chonburi, Kanchanaburi, Phuket, and Prachuap Khiri Khan.
According to the data from the Ministry of Tourism and Sports, Bangkokretained its top spot with 4,459,579 visitors, of which 49.60% were international tourists. The occupancy rate for Bangkok hotels was 76.32%.
Chonburi, the home province of the resort city of PattayaPattaya, came in second with 1,892,712 visitors, of which 49.88% were international tourists. The hotel occupancy rate was 76.69%.
Kanchanaburi came in third, welcoming 1,185,695 visitors. The tourists, however, mostly consisted of Thai people with only 3.04% being foreigners. The hotel occupancy rate was 65.19%.
Meanwhile, in the fourth place was Phuket, which saw only 1,171,189 visitors. 78.75% of these were international tourists. The province's hotels saw an occupancy rate of 86.37%.
Lastly, Prachuap Khiri Khan rounded out the top five with 979,818 visitors, including 6.08% international tourists and an occupancy rate of 72.83%.
The least visited province was Amnat Charoen with 23,207 visitors, followed by Nong Bua Lamphu, Mahasarakham, Pattani, and Yasothon.
Overall, Thailand welcomed 29,151,310 visitors in March 2024, representing a 12.15% growth compared to the previous year. International tourists generated approximately 583.902 billion baht in revenue.
The top five nationalities visiting Thailand in the first four months of 2024 were Chinese (2,351,909), Malaysian (1,569,856), Russian (767,210), South Korean (679,481), and Indian (643,587).
The Ministry of Tourism and Sports noted that Chinese tourists surpassed Malaysians as the top nationality. In 2023, the top five nationalities were Malaysian (4,563,020), Chinese (3,519,735), South Korean (1,658,688), Indian (1,626,720), and Russian (1,481,878).
Prime Minister Srettha Thavisin has outlined the Thai government's strategy to transform Thailand into a high-income economy, focusing on attracting foreign investment and implementing projects that enhance the quality of life for its citizens. Speaking at a Pheu Thai Party event, Srettha highlighted the government's proactive approach to addressing national issues since assuming office.
At the event themed "10 Months Without Waiting, Moving Forward to Achieve 10 out of 10," Srettha discussed the improvement of water resource management to mitigate flooding, new strategies for addressing unrest in the deep South, measures to boost tourism by opening borders, and ways to regulate agricultural product prices to combat haze pollution.
The premier also addressed the government's ongoing efforts to alleviate people's debt burdens, noting recent successes such as the agreement by commercial banks to reduce the minimum retail rate (MRR) for loans by 25 basis points for six months.
Pheu Thai leader Paetongtarn Shinawatra, who also spoke at the event, defended the decision to form a coalition government and criticized the Bank of Thailand's independence, which she described as an obstacle to solving economic challenges. However, she expressed optimism that the current government could improve the nation's fortunes before the next election.
Paetongtarn has also praised the recent cabinet reshuffle, viewing it as a positive step forward. She also reaffirmed the party's commitment to pursuing its policy goals, expressing determination to achieve significant progress in various areas to bolster Thailand's economic standing on the global stage.
The Bank of Thailand has stalled the proposed introduction of an additional 1% fee on local credit cardholders, necessitating card issuers to consider other alternatives. This decision was taken after several credit card issuers declared that they would be waiving the 1% fee for payments made in baht to overseas registered merchants and online shopping platforms.
Earlier in March, these issuers had announced their intention to impose a 1% fee on Thai credit cardholders for foreign currency conversion on payments made at overseas merchants with Visa and Mastercard. Known as dynamic currency conversion (DCC), this fee was expected to take effect on May 1. This fee would also be applicable to the withdrawal of baht banknotes from ATMs overseas.
However, the announcement was met with considerable dissatisfaction from local credit cardholders, which led the Bank of Thailand to encourage all parties to create a better understanding and ensure fair and reasonable banking fees.
The decision to impose the fee was a result of the significant costs credit card issuers had to bear due to the increase in overseas payments and online payments on foreign platforms by local cardholders. At present, local credit card providers impose a foreign currency conversion fee of up to 2.5% of total spending on Thai-issued Visa and Mastercard for overseas spending and on foreign-registered online platforms.
Given the central bank's directive, an anonymous banking industry source has revealed that credit card issuers are likely to indefinitely waive this fee. The regulator is urging credit card providers to understand the grievances of cardholders about the fee and encouraging them to look for alternative payment methods that would be beneficial to cardholders.
Kulthirath Pakawachkrilers, president of the Thai E-commerce Association, had earlier voiced concerns about the impact of DCC on consumers using Visa and Mastercard for high-purchase spending. She suggested that consumers might prefer other payment options, such as e-wallets.
Kulthirath also mentioned that several platforms, including Spotify, VIU, Agoda, Booking.com, Expedia, Klook, Airbnb, Trip.com, Facebook, Google, TikTok, Paypal, Alipay, eBay, Amazon, Alibaba, and Taobao, are likely to be affected by the DCC. However, platforms such as Shopee (Thailand), Lazada (Thailand), and Grab Taxi (Thailand) should remain unaffected, reported Bangkok Post.
According to a Bank of Thailand report on e-payments last year, their value reached 28.8 trillion baht (US$ 783 billion), marking a 10.4% increase from 2022. Card payments accounted for 5.9 trillion baht (US$ 160 billion), up by 8.2% from 2022.
A viral OnlyFans video showing a man and woman involved sexually on Bangsean Beach, Chonburi, has sparked public anger.
The couple was seen performing indecent acts against a coconut tree along the Bangsean beachside path, somewhere known as a family-friendly spot. The video's circulation online has resulted in widespread condemnations, with residents terming the act as inappropriate.
Local traders expressed their disbelief and questioned why the couple did not consider filming in a more private location, like hotels or resorts. They further called on authorities to address the issue, primarily due to the potential negative influence on youth.
As it stands, local law enforcement is reportedly investigating the incident, with a possible prosecution for the couple under Thai obscenity laws. The viral video has emphasized the negative impact, not only on the ethical standards of the community but also on Bangsean's reputation as a family-friendly locality.
Priserna på resor, särskilt utrikesflyg, har visat sig vara starkt säsongsbetonade och under de senaste tolv månaderna har priserna fluktuerat betydligt. En jämförelse av medelpriserna under årets första kvartal visar en markant ökning jämfört med tidigare år, enligt statistik från SCB.
Caroline Neander, prisstatistiker på SCB, förklarar att priserna för utrikesflyg under januari till mars 2023 var nästan 12 procent högre än under samma period året innan, och hela 43 procent högre jämfört med 2022. Detsamma gäller för flygcharter, där priserna har stigit med 16 procent jämfört med året innan och 40 procent jämfört med 2022.
Neander poängterar att även om höga priser på enskilda produkter i Konsumentprisindex är normalt över tid, har prisutvecklingen för utrikesflyg historiskt sett inte följt samma mönster som KPI. Under de senaste 30 åren har priserna på utrikesflyg ökat med 51 procent, jämfört med KPI:s 68 procent. Dock har de senaste tio åren sett en accelererad ökning, där utrikesflygpriserna har ökat nästan dubbelt så mycket som KPI. Utrikesflyg har blivit nästan 63 procent dyrare samtidigt som KPI stigit med drygt 32 procent.
According to Mr Theeraj, e-commerce trade expanded significantly during the pandemic compared with the period before the emergence of Covid-19, especially for low-priced imported goods from China transported overland to Thailand.
Thailand has embraced the digital economy, with trade on foreign online platforms increasing rapidly, disrupting domestic entrepreneurs.
Local businesses are struggling to compete on price, resulting in some fading away. The government was pushed to act by domestic entrepreneurs as cheap Chinese products flooded the market.
Imported goods sold for less than 1,500 baht per package were previously exempt from value-added tax (VAT) and import duties.
Online platforms selling goods from China import a large quantity of low-priced goods in containers, each containing tens of thousands of items.
This poses a significant challenge and it would require a considerable amount of time if each box had to be opened in order to assess the correct rates of tax, as proposed by the Finance Ministry.
This unfair competition prompted the Finance Ministry to recently rule to cancel the value-added tax exemption for low-priced goods.
Starting in May, the Customs Department is collecting VAT for imported goods sent via postal services, regardless of the value of the goods.
Q: Is the practice of exempting tax levies for low-priced goods accepted globally?
According to Theeraj Athanavanich, director-general of the Customs Department, exempting taxes for low-priced goods is a principle adopted by many countries, as they perceive that the importation of low-priced goods from other countries by individuals in the country is unlikely to be carried out for commercial purposes. Therefore, taxes are exempted for low-priced goods, with each country setting different thresholds concerning the value of the goods.
In the case of the US, the country set its threshold for imported low-priced goods at no more than 20,000 baht per item, while Thailand has deemed that low-priced goods are those valued at no more than 1,500 baht per item. The exemption threshold depends on the economic conditions of each country.
E-commerce now plays a significant role in both domestic and international trade. Purchasing a single item such as a shirt from overseas has become increasingly accessible. In the past, such a purchase was difficult due to the high costs involved or a lack of economy of scale.
This type of trade is now impacting domestic businesses, creating unfair competition or a lack of a level playing field because these exempted goods face no tax burden.
Consequently, many countries are starting to impose taxes on low-priced goods, such as Australia, while the US is also considering implementing similar taxes.
Q: How will the VAT collection operate?
According to Mr Theeraj, the department will allow platforms to declare the price of the imported product and deduct the VAT from that price, then send the tax payment to the Customs Department.
The department already collects VAT for goods valued at more than 1,500 baht apiece.
For individuals who import such goods from abroad and have them sent via a postal service, the Customs Department already has a tax collection system in place.
A tax notification is sent to the recipient's address, stating the tax obligation. The recipient must then make the tax payment to the department before collecting the goods from the post office.
According to Mr Theeraj, during the Covid-19 pandemic, e-commerce trade expanded significantly compared to the years before the pandemic, especially for low-priced imported goods from China transported by trucks.
The statistics for express imported goods (parcel express) -- exempted from tax since 2021 -- imported through Suvarnabhumi Airport Customs Office and Mukdahan and Nakhon Phanom Customs Offices combined, amounted to 40.8 million packages worth 9.84 billion baht.
In 2022, the number increased to 47.1 million packages worth 11.6 billion baht, and the latest data for 2023 reveals an increase to 56.8 million packages worth 17.9 billion baht.
Regarding imports via postal services (all dispatched via Laksi mail centre), there were 4.09 million packages worth 1.14 billion baht in 2021, with the number decreasing to 2.91 million packages worth 895 billion baht in 2022, and further decreasing to 2.11 million packages worth 676 billion baht in 2023.
Mr Theeraj insisted the purpose of the VAT collection is not to increase tax revenue for the government, but rather to promote fairness between domestic and foreign businesses.
Q: Will collecting VAT from cheap imports sent via the postal system level the playing field?
Paul Srivorakul, group chief executive of aCommerce, a leading e-commerce enabler, said the VAT collection ensures that all goods, regardless of origin, are subject to the same tax standards, thus levelling the playing field for local products and domestic businesses. This should also increase government revenue through both import duties and VAT.
However, enforcing the new duties on lower-value goods might introduce complexity in customs processes, potentially slowing down the importation of goods and impacting businesses reliant on imported products, he added.
The e-commerce sector, especially the marketplaces, which benefits significantly from the sales of imported low-value goods may face an impact from the VAT collection on cheap imported goods.
However, the benefits to local SMEs and the Thai economy far outweigh the impact on Chinese e-commerce platforms.
Mr Paul added that Thailand also needs a simplified tax structure, possibly a flat-rate tax model for low-value imports to ease the administrative burden on customs and businesses.
Alessandro Piscini, the founder of CREA, a leading e-commerce enabler, said the tax collection would reduce the gap between local SMEs and Chinese players regarding cross-border products, but he noted that the large China-based factories would most likely continue to have a cost advantage.
Kulthirath Pakawachkrilers, president of the Thai e-Commerce Association, said Thai entrepreneurs who do not import from China should feel better about the issuance of this tax measure. From the perspective of Thai entrepreneurs who trade with China, they should see the tax as an increase in costs.
Ms Kulthirath said that by implementing this VAT policy, related ministries and state agencies should examine the related agreements between Thailand and China as the policy could have some impacts that might affect their bilateral relations.
Q: Is the measure likely to be effective?
Aat Pisanwanich, an independent analyst on international trade, said imposing the 7% VAT on cheap imported goods, mostly from China, might not deter the influx of products because their production costs are significantly lower.
Even with the additional 7% tax, Chinese goods remain cheaper than similar goods produced in Thailand.
According to Mr Aat, relying solely on tax measures is not the ultimate solution to protect domestic producers. It is necessary to complement tax measures with other actions, such as controlling the standards of imported goods to ensure they meet domestic standards or have good agricultural practices (GAP) standards, among others.
He cited Indonesia as a good example of using measures to protect domestic businesses. For instance, if goods are imported at a lower price than domestically produced goods of the same type, a tax must be levied on those imported goods to ensure their selling price is equivalent to domestically produced goods.
At the same time, measures have been taken to prohibit the sale of low-priced goods worth less than 3,500 baht on online platforms. The steps taken in Indonesia have helped reduce the trade deficit with China, whereas Thailand faces the largest trade deficit with China, amounting to 1 trillion baht a year.
He noted that Thailand's significant consideration towards China may be due to various factors, including the country's heavy reliance on China, be it exports, investment inflows, or tourists.
Q: What is the outlook for industries affected by the flood of cheap Chinese goods?
Mr Aat said many industries are being affected by the influx of Chinese goods, particularly the steel industry. Instead of importing steel from China for sale in Thailand, Chinese entrepreneurs are now establishing steel production plants within Thailand by importing raw materials and machinery from China.
The production capacity of a single Chinese-owned steel plant now equals that of all Thai steel producers combined.
Furthermore, they can sell their steel at a lower price. As a result, Thai-owned steel plants currently operate at only 30% capacity because they cannot compete with the prices of Chinese steel. The steel industry serves as a reflection of the broader impact of the inundation of cheap Chinese goods on Thai industries.
He proposed Thailand establish conditions for foreign investment in the way that Indonesia has, which mandates a local content requirement for foreign direct investment.
Mr Aat said if Thailand doesn't implement any additional measures to help Thai entrepreneurs, it is believed that in no more than five years from now, Thai entrepreneurs will completely vanish.
He referred to the situation in which China evidently dominates businesses in Thailand. For example, Chinese traders already control around 70% of fruit sales in Thailand.
If Chinese traders gain complete control over fruit farms in Thailand, Thai traders are unlikely to be able to survive. In fact, he noted that Thai traders are merely the Chinese traders' stooges.
