Dep Minister of Finance Pradit Phataraprasit to lead an Open Forum on Wed 10th Feb to solicit direct input from private sector on how government can help them operate more competitively in the region
Deputy Minister of Finance Pradit Phataraprasit, today, (Wednesday 3 February) announced that the government is formulating plans to boost tax and non-tax benefits to companies that locate their regional operating headquarters in Thailand.
“We aim to reinforce Thailand’s position in the region as an important manufacturing and services hub,” said Deputy Finance Minister Pradit who chairs a committee charged with developing a set of recommendations that can make Thailand a more attractive location for the regional operating headquarters of companies.
He said, “The establishment of a regional headquarters in Thailand by giant foreign companies can generate enormous benefits for our country and accelerate economic growth. It results in the location in Thailand of many high-salaried expatriate managers; it means more demand for housing, more shopping and other spending, and more business for hotels and restaurants with a greater number of international events being organized in Thailand. It also means that Thai staff have more opportunity to become regional managers with much higher salaries and responsibilities.”
Mr. Pradit said that he is organizing an Open Forum meeting on Wednesday 10th February at the Queen Sirikit National Convention Center for the private sector to give direct input to him on how they believe Thailand could become more attractive as a regional operating headquarters for their companies.
“I want this to be a collaborative effort that gets the best ideas on the table, and to weed out what isn’t important to the private sector,” said Mr. Pradit.
He said that, “multiple government agencies are working together and all key people responsible for developing and submitting these recommendations for Cabinet approval will be present at the session to listen to the views of the private sector, including the Board of Investment, the Bank of Thailand, the Revenue Department, the Fiscal Policy Office, as well as the Federation of Thai Industries, and the Thai Chamber of Commerce, in addition to himself and the Permanent Secretary of the Ministry of Finance.”
HOW TO REGISTER TO ATTEND
Attendance is free. To book a place, please email or fax representatives’ Name, Title, and Company to ROHforum@gmail.com , or fax: 02-664 9515, Attention: Khun Pairoj. Reservations should be made no later than Monday 8th February. Seating is limited and available on a first come, first served basis. Presentations will be in English and Thai.
Sunday, February 7, 2010
Saturday, January 30, 2010
THE THAI PROPERTY MARKET TRENDS IN 2010
2009 was a challenging year for the Thai property market, but CB Richard Ellis (CBRE) sees positive signs for 2010. Whilst 2009 has been a tough year, it was not as bad as many expected.
2010 has begun with a more positive market sentiment. The improving economic outlook globally and perception of Thailand’s political situation, together with low market prices compared to other mature property markets, have had a positive impact on consumer confidence in property investment in Thailand.
Following the economic crisis, the supply of new office, retail and industrial space is at an all-time low. These sectors are expected to improve this year, in line with the global and local economic recovery.
Thailand’s residential market in 2009 was primarily driven by local demand. This year, CBRE believes that local demand will continue to be strong and that individual foreign property investors will start to return to the market. Thai condominium prices remain attractive compared to other cities in the region, such as Shanghai, Hong Kong and Singapore where prices have risen sharply in the last six months.
Average Price of Luxury Residential Units in the Region (THB per sq.m.)
City 2008 2009 %Change
y-o-y
Shanghai THB 176,032 THB 189,659 7.7
Hong Kong THB 622,549 THB 722,376 16.3
Singapore THB 479,327 THB 555,481 12.8
Bangkok THB 117,875 THB 124,539 5.6
Source: CBRE Research
However, there are continuing concerns about Thailand’s political stability and the strength of the global economy. If Thailand’s economy and politics are stable in 2010, the residential sector will see consistent positive growth.
Government Policy
The Government stimulus package will expire in March 2010 and it remains uncertain whether it will be extended. CBRE believes the extension of this package will benefit buyers and developers of large condominium projects launched during the crisis which are due for completion and transfer within this year.
The initiative of this government to reform property and land taxation with a view to creating fairness sounds positive, but it will only be possible to determine the effect on the property market once the details of the proposed legislation have been finalised. “So long as the new tax legislation is on a fair basis and the tax rate not so excessively high as to discourage investment, CBRE sees this reform as beneficial for the market,“ Ms. Aliwassa Pathnadabutr, Managing Director of CBRE Thailand said. An additional measure that CBRE urges the government to consider is the extension of the long lease term from the current 30 years up to a maximum of 90 years. This will help improve the market mechanism and make large-scale commercial projects viable which would not be feasible if such developments were freehold due to the high land cost or if they were on a 30-year lease due to the limits on lease terms. The extension of the lease term will also have a direct benefit for resort destinations such as Phuket and Samui where the property markets are primarily driven by foreign demand.
Looking at 2010 and beyond, environmental issues are a key consideration for all industries including the property market. There will be more restrictions which may increase the cost for developers. The Environmental Impact Assessment (EIA) process is one of the key concerns and risks for developers as there are uncertainties in the details and timing required to obtain such a permit. This is one of the factors which are likely to delay the emergence of new supply.
Any additional incentives that would attract foreign direct investment in both manufacturing and the service industries would be welcomed, in order to enable Thailand to compete with rival destinations.
Office : The Market Should Improve in 2010
Bright future due to limited new supply
In 2010, there will be very limited new supply in the office sector. Only 78,380 sq.m. are due to be completed, including Sathorn Square (72,500 sq.m.) and Sivatel Wireless Road (5,880 sq.m.). CBRE sees the limited increase in new supply as a positive indicator for the office market because any increase in take-up will reduce vacancy rates and lead to rental increases. At the end of 2009 the vacancy rate stood at 12%.
Even though net demand in 2009 dropped by more than 50 % to only 52,000 sq.m., average grade A CBD office rents fell by 7.26% to THB 690 per sq.m while grade B CBD office rents fell by 12% to THB 509 per sq.m. This is considerably better than in other markets. Rents fell by 52.6% in Singapore and 49.9% in Hong Kong in 2009.
Average Grade A CBD Office Rents in the Region (THB per sq.m.)
City 2008 2009 % Change
Y-o-Y
Hong Kong THB 4,107 THB 2,255 -49.09%
Singapore THB 4,041 THB 1,913 -52.66%
Bangkok THB 744 THB 690 -7.26%
Source: CBRE Research
Following the recovery of the global economic, CBRE believes that companies will be less cost conscious and that 2010 will be a good time to take advantage of the low rents to relocate to newer buildings.
Sathorn Square – the only new grade A office building to be completed in 2010.
Condominium : The Most Exciting and the Most Competitive
Supply Outlook : More competitive market in 2010
The total supply of downtown condominiums increased to 61,522 units by the end of Q3 2009, up 14% year-on-year. In total, there are 17,664 units under construction in downtown Bangkok, of which 78% of which have been reportedly sold, leaving 3,879 units being marketed (completed and under construction).
In 2009, there were 3,912 units in 15 projects launched in the downtown area, with the majority being one-bedroom unit types. In 2010 CBRE expects a much more competitive market, with an increasing number of project launches as there is pent-up supply from developers who have delayed their projects since the onset of the economic crisis in late 2008 and also new supply from large developers who acquire plots of land for new developments.
Newly Launched Condominium Projects* Broken Down by Unit Type
Year Studio 1 B/R 2 B/R 3 B/R 4 B/R PH Total
2008 243 2,270 1,090 194 19 10 3,826
2009 54 1,284 694 10 0 0 2,042
Total 297 3,554 1,784 204 19 10 5,868
Source: CBRE Research
* Include 18 selected projects in 2008 and 11 selected projects in 2009 as of Q3 2009.
Demand Outlook : Demand continues to be strong
CBRE sees a growing demand for condominiums driven primarily by a change in lifestyle which has led to the need to own a first or second home in the CBD or near mass transit routes to reduce the need to commute. From an investment perspective, investors also increasingly recognise condominium purchases as an appreciating long-term investment asset. In the past, there were few Thai investors in the market. However, with lower interest rates and proven returns, investing in condominiums has become a popular investment choice for many Thais. It is also considered a safe and secure investment compared to the equities market which is much more volatile.
New Trends : Good locations, small furnished units with affordable prices
From the development side, developers need to ensure they are ahead of the game in trying to predict future location trends. The danger is that a popular location can quickly become saturated with new supply. The key to success is either to be the first to launch in an upcoming location, or to find a location with high barriers to entry.
New supply especially for the middle income market will focus on smaller units at affordable prices. In a competitive market with experienced buyers, products must offer quality as well as innovative and functional design in order to be successful. The reliability and reputation of the developer is another key consideration for buyers.
Luxury and Super Luxury Segments : Limited future supply
The luxury and super luxury condominium segment is expected to slowly recover and develop into a niche market. Prime downtown land is rarely available for sale and prices will remain high, CBRE, therefore, does not expect many new launches for luxury condominiums in prime downtown locations.
With a wave of new launches focusing on smaller one-bedroom units along mass transit routes with prices ranging from THB 3 to 8 million, the majority of unsold two to three-bedroom units priced at over THB 15 million and developed before the crisis should soon be absorbed. There will then be a shortage of two-bedroom units in the luxury market especially in prime locations. Short-term investors will speculate on one-bedroom units whereas long-term investors will focus on two and three bedroom units which are in demand among expatriates in the rental market, while smaller units are driven by local demand. With a limited supply of newly launched larger units CBRE believes the existing supply of such grade-A units in prime locations will continue to appreciate in value.
2010 Pricing Trends : Completed prime condo prices on the rise
In terms of price movement, CBRE sees no significant increase in prices per sq.m for mid-market condominiums as the economic recovery is still underway with the prevailing political problems which continue to concern buyers. The best selling segment is priced at THB 50,000 – 80,000 per sq.m in mid-town locations or within 15 kilometres of the CBD. Prices in this segment are unlikely to increase as the purchasing power of the target market is limited. The developers have to compete on cost control and pricing.
Prices for completed high-end and luxury downtown condominium have increased slightly by 5.6% from THB 117,875 per sq.m from Q4 2008 to THB 124,539 per sq.m in Q3 2009 and CBRE believes that the prices of completed buildings in prime locations will continue to rise in 2010.
Prices of the future supply of high-end and luxury downtown condominium in 2009 fell slightly by 6.3% from THB 142,133 per sq.m in Q4 2008 to THB 133,134 per sq.m in Q3, 2009 due to the slow market conditions. New launches in 2010 are likely to see an increase in price per sq.m due to the higher construction costs but, as unit sizes are smaller, total unit prices will be on par with current levels.
Retail : More Focus
Improvement expected following return of consumer confidence
In the first three quarters of 2009, the supply of retail space grew by 6.6% or 327,125 sq.m. Whilst occupancy was stable throughout the year, rents were flat and even fell in some cases during the earlier part of 2009. The fourth quarter showed signs of consumer confidence and spending returning.
The trend for new retail centres in Bangkok is evolving from one-stop mega shopping complexes to more focused community malls and medium-sized lifestyle and entertainment complexes such as Esplanade Rattanathibet.
The major players in the retail market are Central, The Mall, Siam Future and Major Cineplex. Retail developments to note this year are Terminal 21 which is currently under construction and located in Sukhumvit at the Asoke junction, Central Rama 9 and Mega Bangna which will house Thailand’s first IKEA store.
Serviced Apartments : Highly Competitive
Occupancy rates are likely to be flat and downward pressure on rents
The serviced apartment sector, which partially depends on tourists and business travellers as well as expatriates working in Bangkok, has suffered from growing supply which led to an overall drop in occupancy and rates in 2009.
Total supply increased to 12,392 units, up by 6.84% year-on-year, with a further 610 units expected to be completed by 2010 and approximately 2,000 units by 2013. Occupancy rates remained at 75% in Q3 2009. Occupancy was partly protected by a number of long-term contracts which are less volatile than the daily rate market. Average rates, however, fell by about 20% year-on-year.
The biggest challenge faced by this sector is the volume of new supply targeting both long-stay expatriates and short-stay businessmen and tourists.
Serviced apartments compete against apartments and particularly small condominium units for rent in the long-stay market and the rapidly growing supply of hotels in the short-stay market. The influx of new supply of both serviced apartments and hotels will continue to exert a downward pressure on both rates and occupancy.
Expatriate Rental Apartments
The total supply of expatriate-standard rental apartments in Bangkok increased to around 11,151 units, up by 4.5% year-on-year
Occupancy remained high at 91%. CBRE has not seen a dramatic drop in the number of expatriates in 2009 but, since companies are trying to maintain or reduce costs, so CBRE does not expect any increase in housing allowances.
Multinational companies continue to be cautious on their expansion plans given that the global economy is yet to fully recover. Thailand’s political problems are also an added factor which has restrained business expansion plans in Thailand.
CBRE does not expect that there will be a significant increase in the number of expatriates in 2010. There will be increased competition from individual “buy-to-rent” condominium owners seeking to lease out units in recently completed developments. There are about 620 apartment units under construction but there are also 17,664 condominium units under construction and CBRE expects that up to 50% of the new condominiums have been bought by purchasers who want to lease out their units on completion. This increase in supply combined with little or no growth in demand will dampen any potential for overall rental growth.
New well-designed condominium and apartment buildings will continue to perform better than older buildings that have not been refurbished or redecorated.
About CB Richard Ellis
CB Richard Ellis Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2008 revenue). The Company has approximately 30,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CB Richard Ellis has been named a BusinessWeek 50 “best in class” company for three years in a row.
CB Richard Ellis established an office in Bangkok in 1988, followed by Phuket office in 2004, and Samui office in 2007. CB Richard Ellis (Thailand) Co., Ltd. has grown to be a leading real estate services provider, offering strategic advice and execution for sales and leasing for all types of property, property and facilities management, valuation and advisory, and research and consulting. For more information, visit the company's website at www.cbre.co.th.
2010 has begun with a more positive market sentiment. The improving economic outlook globally and perception of Thailand’s political situation, together with low market prices compared to other mature property markets, have had a positive impact on consumer confidence in property investment in Thailand.
Following the economic crisis, the supply of new office, retail and industrial space is at an all-time low. These sectors are expected to improve this year, in line with the global and local economic recovery.
Thailand’s residential market in 2009 was primarily driven by local demand. This year, CBRE believes that local demand will continue to be strong and that individual foreign property investors will start to return to the market. Thai condominium prices remain attractive compared to other cities in the region, such as Shanghai, Hong Kong and Singapore where prices have risen sharply in the last six months.
Average Price of Luxury Residential Units in the Region (THB per sq.m.)
City 2008 2009 %Change
y-o-y
Shanghai THB 176,032 THB 189,659 7.7
Hong Kong THB 622,549 THB 722,376 16.3
Singapore THB 479,327 THB 555,481 12.8
Bangkok THB 117,875 THB 124,539 5.6
Source: CBRE Research
However, there are continuing concerns about Thailand’s political stability and the strength of the global economy. If Thailand’s economy and politics are stable in 2010, the residential sector will see consistent positive growth.
Government Policy
The Government stimulus package will expire in March 2010 and it remains uncertain whether it will be extended. CBRE believes the extension of this package will benefit buyers and developers of large condominium projects launched during the crisis which are due for completion and transfer within this year.
The initiative of this government to reform property and land taxation with a view to creating fairness sounds positive, but it will only be possible to determine the effect on the property market once the details of the proposed legislation have been finalised. “So long as the new tax legislation is on a fair basis and the tax rate not so excessively high as to discourage investment, CBRE sees this reform as beneficial for the market,“ Ms. Aliwassa Pathnadabutr, Managing Director of CBRE Thailand said. An additional measure that CBRE urges the government to consider is the extension of the long lease term from the current 30 years up to a maximum of 90 years. This will help improve the market mechanism and make large-scale commercial projects viable which would not be feasible if such developments were freehold due to the high land cost or if they were on a 30-year lease due to the limits on lease terms. The extension of the lease term will also have a direct benefit for resort destinations such as Phuket and Samui where the property markets are primarily driven by foreign demand.
Looking at 2010 and beyond, environmental issues are a key consideration for all industries including the property market. There will be more restrictions which may increase the cost for developers. The Environmental Impact Assessment (EIA) process is one of the key concerns and risks for developers as there are uncertainties in the details and timing required to obtain such a permit. This is one of the factors which are likely to delay the emergence of new supply.
Any additional incentives that would attract foreign direct investment in both manufacturing and the service industries would be welcomed, in order to enable Thailand to compete with rival destinations.
Office : The Market Should Improve in 2010
Bright future due to limited new supply
In 2010, there will be very limited new supply in the office sector. Only 78,380 sq.m. are due to be completed, including Sathorn Square (72,500 sq.m.) and Sivatel Wireless Road (5,880 sq.m.). CBRE sees the limited increase in new supply as a positive indicator for the office market because any increase in take-up will reduce vacancy rates and lead to rental increases. At the end of 2009 the vacancy rate stood at 12%.
Even though net demand in 2009 dropped by more than 50 % to only 52,000 sq.m., average grade A CBD office rents fell by 7.26% to THB 690 per sq.m while grade B CBD office rents fell by 12% to THB 509 per sq.m. This is considerably better than in other markets. Rents fell by 52.6% in Singapore and 49.9% in Hong Kong in 2009.
Average Grade A CBD Office Rents in the Region (THB per sq.m.)
City 2008 2009 % Change
Y-o-Y
Hong Kong THB 4,107 THB 2,255 -49.09%
Singapore THB 4,041 THB 1,913 -52.66%
Bangkok THB 744 THB 690 -7.26%
Source: CBRE Research
Following the recovery of the global economic, CBRE believes that companies will be less cost conscious and that 2010 will be a good time to take advantage of the low rents to relocate to newer buildings.
Sathorn Square – the only new grade A office building to be completed in 2010.
Condominium : The Most Exciting and the Most Competitive
Supply Outlook : More competitive market in 2010
The total supply of downtown condominiums increased to 61,522 units by the end of Q3 2009, up 14% year-on-year. In total, there are 17,664 units under construction in downtown Bangkok, of which 78% of which have been reportedly sold, leaving 3,879 units being marketed (completed and under construction).
In 2009, there were 3,912 units in 15 projects launched in the downtown area, with the majority being one-bedroom unit types. In 2010 CBRE expects a much more competitive market, with an increasing number of project launches as there is pent-up supply from developers who have delayed their projects since the onset of the economic crisis in late 2008 and also new supply from large developers who acquire plots of land for new developments.
Newly Launched Condominium Projects* Broken Down by Unit Type
Year Studio 1 B/R 2 B/R 3 B/R 4 B/R PH Total
2008 243 2,270 1,090 194 19 10 3,826
2009 54 1,284 694 10 0 0 2,042
Total 297 3,554 1,784 204 19 10 5,868
Source: CBRE Research
* Include 18 selected projects in 2008 and 11 selected projects in 2009 as of Q3 2009.
Demand Outlook : Demand continues to be strong
CBRE sees a growing demand for condominiums driven primarily by a change in lifestyle which has led to the need to own a first or second home in the CBD or near mass transit routes to reduce the need to commute. From an investment perspective, investors also increasingly recognise condominium purchases as an appreciating long-term investment asset. In the past, there were few Thai investors in the market. However, with lower interest rates and proven returns, investing in condominiums has become a popular investment choice for many Thais. It is also considered a safe and secure investment compared to the equities market which is much more volatile.
New Trends : Good locations, small furnished units with affordable prices
From the development side, developers need to ensure they are ahead of the game in trying to predict future location trends. The danger is that a popular location can quickly become saturated with new supply. The key to success is either to be the first to launch in an upcoming location, or to find a location with high barriers to entry.
New supply especially for the middle income market will focus on smaller units at affordable prices. In a competitive market with experienced buyers, products must offer quality as well as innovative and functional design in order to be successful. The reliability and reputation of the developer is another key consideration for buyers.
Luxury and Super Luxury Segments : Limited future supply
The luxury and super luxury condominium segment is expected to slowly recover and develop into a niche market. Prime downtown land is rarely available for sale and prices will remain high, CBRE, therefore, does not expect many new launches for luxury condominiums in prime downtown locations.
With a wave of new launches focusing on smaller one-bedroom units along mass transit routes with prices ranging from THB 3 to 8 million, the majority of unsold two to three-bedroom units priced at over THB 15 million and developed before the crisis should soon be absorbed. There will then be a shortage of two-bedroom units in the luxury market especially in prime locations. Short-term investors will speculate on one-bedroom units whereas long-term investors will focus on two and three bedroom units which are in demand among expatriates in the rental market, while smaller units are driven by local demand. With a limited supply of newly launched larger units CBRE believes the existing supply of such grade-A units in prime locations will continue to appreciate in value.
2010 Pricing Trends : Completed prime condo prices on the rise
In terms of price movement, CBRE sees no significant increase in prices per sq.m for mid-market condominiums as the economic recovery is still underway with the prevailing political problems which continue to concern buyers. The best selling segment is priced at THB 50,000 – 80,000 per sq.m in mid-town locations or within 15 kilometres of the CBD. Prices in this segment are unlikely to increase as the purchasing power of the target market is limited. The developers have to compete on cost control and pricing.
Prices for completed high-end and luxury downtown condominium have increased slightly by 5.6% from THB 117,875 per sq.m from Q4 2008 to THB 124,539 per sq.m in Q3 2009 and CBRE believes that the prices of completed buildings in prime locations will continue to rise in 2010.
Prices of the future supply of high-end and luxury downtown condominium in 2009 fell slightly by 6.3% from THB 142,133 per sq.m in Q4 2008 to THB 133,134 per sq.m in Q3, 2009 due to the slow market conditions. New launches in 2010 are likely to see an increase in price per sq.m due to the higher construction costs but, as unit sizes are smaller, total unit prices will be on par with current levels.
Retail : More Focus
Improvement expected following return of consumer confidence
In the first three quarters of 2009, the supply of retail space grew by 6.6% or 327,125 sq.m. Whilst occupancy was stable throughout the year, rents were flat and even fell in some cases during the earlier part of 2009. The fourth quarter showed signs of consumer confidence and spending returning.
The trend for new retail centres in Bangkok is evolving from one-stop mega shopping complexes to more focused community malls and medium-sized lifestyle and entertainment complexes such as Esplanade Rattanathibet.
The major players in the retail market are Central, The Mall, Siam Future and Major Cineplex. Retail developments to note this year are Terminal 21 which is currently under construction and located in Sukhumvit at the Asoke junction, Central Rama 9 and Mega Bangna which will house Thailand’s first IKEA store.
Serviced Apartments : Highly Competitive
Occupancy rates are likely to be flat and downward pressure on rents
The serviced apartment sector, which partially depends on tourists and business travellers as well as expatriates working in Bangkok, has suffered from growing supply which led to an overall drop in occupancy and rates in 2009.
Total supply increased to 12,392 units, up by 6.84% year-on-year, with a further 610 units expected to be completed by 2010 and approximately 2,000 units by 2013. Occupancy rates remained at 75% in Q3 2009. Occupancy was partly protected by a number of long-term contracts which are less volatile than the daily rate market. Average rates, however, fell by about 20% year-on-year.
The biggest challenge faced by this sector is the volume of new supply targeting both long-stay expatriates and short-stay businessmen and tourists.
Serviced apartments compete against apartments and particularly small condominium units for rent in the long-stay market and the rapidly growing supply of hotels in the short-stay market. The influx of new supply of both serviced apartments and hotels will continue to exert a downward pressure on both rates and occupancy.
Expatriate Rental Apartments
The total supply of expatriate-standard rental apartments in Bangkok increased to around 11,151 units, up by 4.5% year-on-year
Occupancy remained high at 91%. CBRE has not seen a dramatic drop in the number of expatriates in 2009 but, since companies are trying to maintain or reduce costs, so CBRE does not expect any increase in housing allowances.
Multinational companies continue to be cautious on their expansion plans given that the global economy is yet to fully recover. Thailand’s political problems are also an added factor which has restrained business expansion plans in Thailand.
CBRE does not expect that there will be a significant increase in the number of expatriates in 2010. There will be increased competition from individual “buy-to-rent” condominium owners seeking to lease out units in recently completed developments. There are about 620 apartment units under construction but there are also 17,664 condominium units under construction and CBRE expects that up to 50% of the new condominiums have been bought by purchasers who want to lease out their units on completion. This increase in supply combined with little or no growth in demand will dampen any potential for overall rental growth.
New well-designed condominium and apartment buildings will continue to perform better than older buildings that have not been refurbished or redecorated.
About CB Richard Ellis
CB Richard Ellis Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2008 revenue). The Company has approximately 30,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CB Richard Ellis has been named a BusinessWeek 50 “best in class” company for three years in a row.
CB Richard Ellis established an office in Bangkok in 1988, followed by Phuket office in 2004, and Samui office in 2007. CB Richard Ellis (Thailand) Co., Ltd. has grown to be a leading real estate services provider, offering strategic advice and execution for sales and leasing for all types of property, property and facilities management, valuation and advisory, and research and consulting. For more information, visit the company's website at www.cbre.co.th.
Wednesday, December 16, 2009
Hawaii's Proactive Budget Management Techniques And Healthy Reserves Support Its 'AA' GO Rating, S&P Report Says
Hawaii's 'AA' general obligation (GO) bond rating reflects our view of management's well-established budget monitoring practices and strong reserve levels, according to a report published today by Standard & Poor's Ratings Services.
"We believe that Hawaii's proactive budget management techniques will result in manageable out-year gaps that state officials will successfully resolve without a significant impact to reserve designations," said Standard & Poor's credit analyst Paul Dyson. "Moreover, in our opinion, the state's level of reserves provides us with credit comfort at the current rating level."
Fiscal 2008 combined reserves, including carry-over and various funds, totaled $590 million, or 11% of expenditures; according to state estimates, combined reserves will decline to $208 million, or 3.9% of expenditures, in fiscal 2009, below the $253 million, or 4.9% of expenditures, forecasted in May 2009. Officials believe various corrective actions including expenditure cuts and revenue enhancements for fiscals 2010 and 2011 should produce ending combined reserve balances closer to 5%-6% of expenditures; however, without such measures, combined reserves could fall to 2%-3% during fiscals 2010 and 2011, and negative by fiscal 2012.
The state constitution requires that the governor and legislature begin to provide tax refunds or credits if the general fund balance exceeds 5% of expenditures for two consecutive years; however, it does not require that refunds or credits immediately lower fund balances to the 5% target, permitting the legislature to retain balances above these levels in recent years. The legislature has faced the situation in the past several fiscal years, which has led to increased appropriation of existing carry-over fund balances for one-time and recurring use. We believe the likely result will be a decrease in the current budgeted and GAAP general fund balance relative to fiscals 2006 through 2008, with an increase most likely dependent on a faster or more robust economic recovery. In our opinion, further significant expenditure reductions will be difficult, but we also recognize that the state and governor have been willing to make them in the past.
After sustained economic expansion between 2003 and 2007, when many sectors performed at record levels, Hawaii's (population 1.3 million) economic trends decelerated and, in many cases, turned negative in 2008 and 2009. However, unlike many markets, the Hawaii housing market experienced only a moderate housing decline: Median home prices as of July 2009 were down just 10% from 2006 levels and only 2.3% of loans went into foreclosure over the last 18 months, ranking it eighth best in the nation. Hawaii's nominal personal income is more stable, and actually increased more than the U.S.' in both 2008 and the first quarter of 2009. The state's median household income was what we consider a strong 121% of the national average as of 2008.
The report is available to RatingsDirect on the Global Credit Portal subscribers at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to research_request@standardandpoors.com. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
"We believe that Hawaii's proactive budget management techniques will result in manageable out-year gaps that state officials will successfully resolve without a significant impact to reserve designations," said Standard & Poor's credit analyst Paul Dyson. "Moreover, in our opinion, the state's level of reserves provides us with credit comfort at the current rating level."
Fiscal 2008 combined reserves, including carry-over and various funds, totaled $590 million, or 11% of expenditures; according to state estimates, combined reserves will decline to $208 million, or 3.9% of expenditures, in fiscal 2009, below the $253 million, or 4.9% of expenditures, forecasted in May 2009. Officials believe various corrective actions including expenditure cuts and revenue enhancements for fiscals 2010 and 2011 should produce ending combined reserve balances closer to 5%-6% of expenditures; however, without such measures, combined reserves could fall to 2%-3% during fiscals 2010 and 2011, and negative by fiscal 2012.
The state constitution requires that the governor and legislature begin to provide tax refunds or credits if the general fund balance exceeds 5% of expenditures for two consecutive years; however, it does not require that refunds or credits immediately lower fund balances to the 5% target, permitting the legislature to retain balances above these levels in recent years. The legislature has faced the situation in the past several fiscal years, which has led to increased appropriation of existing carry-over fund balances for one-time and recurring use. We believe the likely result will be a decrease in the current budgeted and GAAP general fund balance relative to fiscals 2006 through 2008, with an increase most likely dependent on a faster or more robust economic recovery. In our opinion, further significant expenditure reductions will be difficult, but we also recognize that the state and governor have been willing to make them in the past.
After sustained economic expansion between 2003 and 2007, when many sectors performed at record levels, Hawaii's (population 1.3 million) economic trends decelerated and, in many cases, turned negative in 2008 and 2009. However, unlike many markets, the Hawaii housing market experienced only a moderate housing decline: Median home prices as of July 2009 were down just 10% from 2006 levels and only 2.3% of loans went into foreclosure over the last 18 months, ranking it eighth best in the nation. Hawaii's nominal personal income is more stable, and actually increased more than the U.S.' in both 2008 and the first quarter of 2009. The state's median household income was what we consider a strong 121% of the national average as of 2008.
The report is available to RatingsDirect on the Global Credit Portal subscribers at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to research_request@standardandpoors.com. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
Tuesday, December 15, 2009
Six Asian Economies Announce Tariff Reductions and Broader Cooperation
Six Asian Economies Announce Tariff Reductions and Broader Cooperation
Agreement comes at Asia-Pacific Trade Ministers Meeting in Seoul
Trade ministers of six Asian countries – including China, India and the Republic of Korea, three of the region’s largest economies – today announced further tariff reductions at the conclusion of the third Asia-Pacific Trade Agreement (APTA) ministerial council in Seoul
During the meeting, the accession process for Mongolia to become an APTA member was also formally initiated. Besides China, India and the Republic of Korea, the other current members of APTA are Bangladesh, Lao PDR and Sri Lanka.
APTA is the only regional trade agreement which links East, Southeast and South Asia. It was negotiated under the auspices of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
“The total trade volume of APTA members skyrocketed from a mere 140 million Dollars in 1976 to 3.1 trillion Dollars in 2008” underlined Mr. Hur Kyung-Wook, First Vice Minister of Strategy and Finance of the Government of the Republic of Korea. “The conclusion of the Fourth Round negotiations will help evolve APTA as a truly significant trade agreement in the Asia-Pacific region” he added.
“I am delighted that APTA members have made significant progress in deepening their agreement and are committed to continuing the process of liberalization” said Mr. Shigeru Mochida, Deputy Executive Secretary of ESCAP.
The six APTA members furthermore committed to expanding their cooperation into investment and trade facilitation by signing formal framework agreements in those two areas. A framework agreement on trade in services was also finalized and will be signed in early 2010.
In their declaration, the ministers called for further tariff
liberalization and negotiations into additional areas of cooperation. They also reaffirmed their commitment to expanding membership into “a truly pan-Asia-Pacific Trade Agreement.”
The Seoul meeting was hosted by the First Vice Minister of Strategy and Finance of the Republic of Korea, Hur Kyung-Wook, and was attended by ministers or vice ministers from the six APTA members, as well as by ESCAP Deputy Executive Secretary Shigeru Mochida.
Agreement comes at Asia-Pacific Trade Ministers Meeting in Seoul
Trade ministers of six Asian countries – including China, India and the Republic of Korea, three of the region’s largest economies – today announced further tariff reductions at the conclusion of the third Asia-Pacific Trade Agreement (APTA) ministerial council in Seoul
During the meeting, the accession process for Mongolia to become an APTA member was also formally initiated. Besides China, India and the Republic of Korea, the other current members of APTA are Bangladesh, Lao PDR and Sri Lanka.
APTA is the only regional trade agreement which links East, Southeast and South Asia. It was negotiated under the auspices of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
“The total trade volume of APTA members skyrocketed from a mere 140 million Dollars in 1976 to 3.1 trillion Dollars in 2008” underlined Mr. Hur Kyung-Wook, First Vice Minister of Strategy and Finance of the Government of the Republic of Korea. “The conclusion of the Fourth Round negotiations will help evolve APTA as a truly significant trade agreement in the Asia-Pacific region” he added.
“I am delighted that APTA members have made significant progress in deepening their agreement and are committed to continuing the process of liberalization” said Mr. Shigeru Mochida, Deputy Executive Secretary of ESCAP.
The six APTA members furthermore committed to expanding their cooperation into investment and trade facilitation by signing formal framework agreements in those two areas. A framework agreement on trade in services was also finalized and will be signed in early 2010.
In their declaration, the ministers called for further tariff
liberalization and negotiations into additional areas of cooperation. They also reaffirmed their commitment to expanding membership into “a truly pan-Asia-Pacific Trade Agreement.”
The Seoul meeting was hosted by the First Vice Minister of Strategy and Finance of the Republic of Korea, Hur Kyung-Wook, and was attended by ministers or vice ministers from the six APTA members, as well as by ESCAP Deputy Executive Secretary Shigeru Mochida.
Thursday, December 3, 2009
Father’s Day Lunch + Dinner Buffet Le Meridien Bangkok
Show dad just how special he is by spending Father’s Day on Saturday 5 December 2009 at the hottest new hotel, Le Meridien Bangkok. With something for everyone, choose between the World cuisine Latest Recipe for lunch or the ultra chic Bamboo Chic for dinner.
Latest Recipe Father’s Day on Stage
World Cuisine buffet
12.00 – 2.30 pm
Price 980 THB
Remind your dad to bring his appetite to the Father’s Day on Stage as the variety of dishes is extensive representing the greatest recipes from Le Meridien around the world. On stage will be presented Parma ham slice-to-order, Alder wood Smoked salmon, NZ mussel, Prime Beef Carving, Crisp salads, cured meats and cheeses, curries, sushi and more. Chef s will be in action at their a la minute food stations where dishes like noodles, pizza, and pasta are expertly made-to-order.
Bamboo Tune Father Forever Day
Japanese Chinese Thai temptations
18.00 pm – 01.00 am
Price 1500 THB
Invite your dad to Bamboo Chic and be enthralled by the charm of its modern, exotic atmosphere. Let his taste buds travel to distant lands from sampling Wagyu beef roll with bamboo leaves, wok fried Japanese black pork with pepper sauce, shark fin soup with crab meat, sliced Yellow tail fish with citrus vinaigrette and more. Also available is the Live style ASIATIC BBQ that include for instance foie gras, import oyster, rock lobster, tiger prawn, Unagi and other Asian delicacies
Choose the perfect match for the man you admire the most. Half price for children age from 5 to 12 and with no charge for children under the age of 5. For more information or reservations, please call Tel: 02 232 8888 or e-mail: fbadmin.LMBKK@lemeridien.com (Price subjects to service charge and government tax)
Latest Recipe Father’s Day on Stage
World Cuisine buffet
12.00 – 2.30 pm
Price 980 THB
Remind your dad to bring his appetite to the Father’s Day on Stage as the variety of dishes is extensive representing the greatest recipes from Le Meridien around the world. On stage will be presented Parma ham slice-to-order, Alder wood Smoked salmon, NZ mussel, Prime Beef Carving, Crisp salads, cured meats and cheeses, curries, sushi and more. Chef s will be in action at their a la minute food stations where dishes like noodles, pizza, and pasta are expertly made-to-order.
Bamboo Tune Father Forever Day
Japanese Chinese Thai temptations
18.00 pm – 01.00 am
Price 1500 THB
Invite your dad to Bamboo Chic and be enthralled by the charm of its modern, exotic atmosphere. Let his taste buds travel to distant lands from sampling Wagyu beef roll with bamboo leaves, wok fried Japanese black pork with pepper sauce, shark fin soup with crab meat, sliced Yellow tail fish with citrus vinaigrette and more. Also available is the Live style ASIATIC BBQ that include for instance foie gras, import oyster, rock lobster, tiger prawn, Unagi and other Asian delicacies
Choose the perfect match for the man you admire the most. Half price for children age from 5 to 12 and with no charge for children under the age of 5. For more information or reservations, please call Tel: 02 232 8888 or e-mail: fbadmin.LMBKK@lemeridien.com (Price subjects to service charge and government tax)
THAI’s Board Ready to Move Forward with Management’s 5 Year Strategic Plan
Thai Airways International Public Company Limited’s Board of Directors and Management led by Mr. Ampon Kittiampon, THAI Chairman of the Board of Directors, and Mr. Piyasvasti Amranand, THAI President, held a workshop on 28 November 2009 to formulate plans to re-establish THAI as a top three airline in Asia and among the five best airlines in the world within two years.
Mr. Piyasvasti Amranand, THAI President, said that the Company’s Management presented a 5 Year Strategic Plan (2010-2014) and the annual budget (2010-2011) to the Board of Directors for which both the Board of Directors and the Management undertook a joint review of the 5 Year Strategic Plan. The Board of Directors agreed in principle to the Strategic Plan, but also made some observations for improvement before submitting the 5 Year Strategic Plan for final Board approval on 18 December 2009. Upon approval of the strategic plan, implementation will commence immediately on its 50th Anniversary (2010) to achieve its goal of TG 100 where THAI will remain a strong and viable airline in its centennial anniversary.
The Strategic Plan emphasizes 3 dimensions: the need to be highly customer oriented, create higher value for customers, and ensuring dynamism. The Strategic Transformation Roadmap to propel the Strategic Plan includes: 1. Strategic Positioning, 2. Building Customer Value, 3. Route Network and Strategy Development, 4. Product Strategy, 5. Pricing, Revenue Management and Distribution Channels, 6. Business Strategy for THAI Business Units, 7. Cost Efficiency and Productivity, 8. Organizational Effectiveness, 9. Financial Strength.
Focus is placed on achieving the highest level of customer satisfaction within 2 years with the plan to refurbish seats and entertainment systems within existing aircraft along with providing improved customer experience at every touchpoint from ticketing, ground services, inflight services until the customer leaves the airport.
To achieve the above goal, the Company’s Board of Directors approved the refurbishment of 12 Boeing 747 aircraft that are utilized primarily on flights to Europe that are high revenue-making routes. Refurbishment will take two years for completion for all 12 aircraft. In the meantime, other service enhancement strategies will need to be immediately put in place, such as improvement to inflight menus, ensuring service standard and consistency at all customer touchpoints.
For 2010, the established targets include achieving revenues of 193,000 million THB, a 20.7 percent increase over 2009. Profit before interest, tax and foreign currency exchange (EBIT) gain/loss is expected to be approximately 4,300 million THB, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) is targeted at approximately 32,000 million THB. Available seat kilometer (ASK) is set for a 10.7 percent increase to 80,000 million for production, revenue passenger kilometer (RPK) is set at 59,000 million, a 13.2 percent increase over 2009. Target average cabin factor for 2010 is 74 percent along with a 11.4 percent increase in freight production (ADTK) and a 14 percent increase in freight revenue over 2009 to 4,400 million ton kilometers (ADTK) and 2,200 million ton kilometers (RFTK), respectively.
Changes will be implemented in 2010 and beyond to strengthen its internal operations and enhancing its competitiveness in 2011. For 2012 and beyond, the solid operating and financial base will enable THAI to again grow and expand with sustainability towards achieving TG 100.
Mr. Piyasvasti Amranand, THAI President, said that the Company’s Management presented a 5 Year Strategic Plan (2010-2014) and the annual budget (2010-2011) to the Board of Directors for which both the Board of Directors and the Management undertook a joint review of the 5 Year Strategic Plan. The Board of Directors agreed in principle to the Strategic Plan, but also made some observations for improvement before submitting the 5 Year Strategic Plan for final Board approval on 18 December 2009. Upon approval of the strategic plan, implementation will commence immediately on its 50th Anniversary (2010) to achieve its goal of TG 100 where THAI will remain a strong and viable airline in its centennial anniversary.
The Strategic Plan emphasizes 3 dimensions: the need to be highly customer oriented, create higher value for customers, and ensuring dynamism. The Strategic Transformation Roadmap to propel the Strategic Plan includes: 1. Strategic Positioning, 2. Building Customer Value, 3. Route Network and Strategy Development, 4. Product Strategy, 5. Pricing, Revenue Management and Distribution Channels, 6. Business Strategy for THAI Business Units, 7. Cost Efficiency and Productivity, 8. Organizational Effectiveness, 9. Financial Strength.
Focus is placed on achieving the highest level of customer satisfaction within 2 years with the plan to refurbish seats and entertainment systems within existing aircraft along with providing improved customer experience at every touchpoint from ticketing, ground services, inflight services until the customer leaves the airport.
To achieve the above goal, the Company’s Board of Directors approved the refurbishment of 12 Boeing 747 aircraft that are utilized primarily on flights to Europe that are high revenue-making routes. Refurbishment will take two years for completion for all 12 aircraft. In the meantime, other service enhancement strategies will need to be immediately put in place, such as improvement to inflight menus, ensuring service standard and consistency at all customer touchpoints.
For 2010, the established targets include achieving revenues of 193,000 million THB, a 20.7 percent increase over 2009. Profit before interest, tax and foreign currency exchange (EBIT) gain/loss is expected to be approximately 4,300 million THB, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) is targeted at approximately 32,000 million THB. Available seat kilometer (ASK) is set for a 10.7 percent increase to 80,000 million for production, revenue passenger kilometer (RPK) is set at 59,000 million, a 13.2 percent increase over 2009. Target average cabin factor for 2010 is 74 percent along with a 11.4 percent increase in freight production (ADTK) and a 14 percent increase in freight revenue over 2009 to 4,400 million ton kilometers (ADTK) and 2,200 million ton kilometers (RFTK), respectively.
Changes will be implemented in 2010 and beyond to strengthen its internal operations and enhancing its competitiveness in 2011. For 2012 and beyond, the solid operating and financial base will enable THAI to again grow and expand with sustainability towards achieving TG 100.
KTC and Land & House present nifty credit card campaign with KTC Forever Rewards points for L&H house plus 150 times of point value.
KTC and Land & House jointly launch the new campaign, “KTC Forever Rewards points for L&H house”. For the first time in the Thai credit card industry, members can use their points as discount toward the purchase of a house in over 40 Land & House development projects, with 150 times of point value from now until December 31st, 2009.
Woravut Nisapakulthorn, Executive Vice President - Credit Card Business, “KTC” or Krungthai Card Public Company Limited, said “KTC is launching a special promotion with the collaboration of Land & House Public Company Limited. “KTC Forever Rewards points for L&H house” embodies the unique qualities of KTC Forever Rewards points: value, convenience and practicality. The campaign will allow KTC members to use their points as discount toward the purchase of a house in over 40 Land & House projects including detached house, town home and condominium from now until December 31st, 2009.”
“KTC members can simply use 2,500 points or more to redeem for the discount to purchase any Land & House project, provided that it costs 3 Million Baht or less. The value of KTC Forever Rewards points has also gone up 150 times for all members. With 2,500 points, members will be entitled to 25,000 Baht discount or 100 times of the regular point value of only 250 Baht. More importantly, members will earn 50 times of the points used to purchase the house. If members use 2,500 points in the purchase, KTC will grant 125,000 extra points in return. Normally members would have to spend 3,125,000 Baht in order to get this many points.”
Woravut Nisapakulthorn, Executive Vice President - Credit Card Business, “KTC” or Krungthai Card Public Company Limited, said “KTC is launching a special promotion with the collaboration of Land & House Public Company Limited. “KTC Forever Rewards points for L&H house” embodies the unique qualities of KTC Forever Rewards points: value, convenience and practicality. The campaign will allow KTC members to use their points as discount toward the purchase of a house in over 40 Land & House projects including detached house, town home and condominium from now until December 31st, 2009.”
“KTC members can simply use 2,500 points or more to redeem for the discount to purchase any Land & House project, provided that it costs 3 Million Baht or less. The value of KTC Forever Rewards points has also gone up 150 times for all members. With 2,500 points, members will be entitled to 25,000 Baht discount or 100 times of the regular point value of only 250 Baht. More importantly, members will earn 50 times of the points used to purchase the house. If members use 2,500 points in the purchase, KTC will grant 125,000 extra points in return. Normally members would have to spend 3,125,000 Baht in order to get this many points.”
Saturday, November 21, 2009
Customers Rush for Tax Savings with “TMB Money Rush Gold Rush” “Receive up to 7,000 Baht in cash back
TMB launches a special promotion to welcome this year Tax Saving Season with an exciting theme “TMB Money Rush Gold Rush” that offers 350 Baht cash back for every 50,000 Baht investment in the RMF/LTF funds with a maximum cash back of 7,000 Baht as well as gold chain worth 2,000 Baht for every 50,000 Baht premium subscription of TMB Smart Life 15/8 life insurance policy with a maximum 40,000 Baht worth of gold. Customers can enjoy these special offers without having to enter into a prize draw. Offers begin October 19 to December 30, 2009.
Mrs.Kanchana Rojvatunyu, Executive Vice President, Head of Retail Marketing Group, TMB Bank Public Company Limited or TMB says, “The tax saving season for 2009 is approaching and working individuals begin to look for alternative means to help them save on tax such as investing in Retirement Mutual Funds (RMF) and Long Term Equity Funds (LTF) or other investment products in the form of saving through life insurance. Therefore, TMB is launching an attractive promotion offer that is simple, raffle-free and catered to the needs of our clients under the concept ‘TMB Money Rush Gold Rush.’ The promotion allows clients not only to enjoy tax saving benefit, but also good return on the investment and a privilege to earn cash back or gold chain.”
Mr. Jumpol Saimala, Executive Vice President - Head of Wealth Management of TMB adds, “TMB Money Rush Gold Rush is a specific promotion designed to reward clients who choose to invest in TMB RMF/LTF funds of TMBAM and/or ING Funds through TMB branches. For every 50,000 Baht investment, clients will receive 350 Baht cash back and are eligible up to 500,000 Baht investment per fund. The cash back money will be deposited into clients’ TMB savings or current account within 90 days after December 30, 2009 (ending date of the promotion).”
“Moreover, clients may choose to maximize their tax saving benefits by subscribing for TMB Smart Life 15/8, a 15-year life insurance coverage policy with only an 8-year premium payment and a return of up to 190%. Clients will receive a gold chain worth 2,000 Baht for every 50,000 Baht net initial premium payment with a maximum premium payment 1 million Baht per policy. Clients can collect gold chain(s) at TMB branch where they have purchased TMB Smart Life 15/8 from March 15, 2010 onwards.
Mrs.Kanchana concludes, “TMB always strives to create promotional offers to support our financial products that are attractive to various needs of our clients. Hence, TMB believes that both cash back and gold chain offers address these needs of our clients especially during this time. More importantly, this campaign encourages our clients to invest and save for their future financial security as well as for their families through growing returns. Simultaneously, they will enjoy tax saving which eventually, becomes an additional source of income.”
All privileges mentioned above are offered to TMB clients nationwide from October 19 to December 30, 2009. Interested client can inquire further information and a prospectus guidebook at any TMB branch, call TMB Phone Banking 1558 or visit www.tmbbank.com.
Mrs.Kanchana Rojvatunyu, Executive Vice President, Head of Retail Marketing Group, TMB Bank Public Company Limited or TMB says, “The tax saving season for 2009 is approaching and working individuals begin to look for alternative means to help them save on tax such as investing in Retirement Mutual Funds (RMF) and Long Term Equity Funds (LTF) or other investment products in the form of saving through life insurance. Therefore, TMB is launching an attractive promotion offer that is simple, raffle-free and catered to the needs of our clients under the concept ‘TMB Money Rush Gold Rush.’ The promotion allows clients not only to enjoy tax saving benefit, but also good return on the investment and a privilege to earn cash back or gold chain.”
Mr. Jumpol Saimala, Executive Vice President - Head of Wealth Management of TMB adds, “TMB Money Rush Gold Rush is a specific promotion designed to reward clients who choose to invest in TMB RMF/LTF funds of TMBAM and/or ING Funds through TMB branches. For every 50,000 Baht investment, clients will receive 350 Baht cash back and are eligible up to 500,000 Baht investment per fund. The cash back money will be deposited into clients’ TMB savings or current account within 90 days after December 30, 2009 (ending date of the promotion).”
“Moreover, clients may choose to maximize their tax saving benefits by subscribing for TMB Smart Life 15/8, a 15-year life insurance coverage policy with only an 8-year premium payment and a return of up to 190%. Clients will receive a gold chain worth 2,000 Baht for every 50,000 Baht net initial premium payment with a maximum premium payment 1 million Baht per policy. Clients can collect gold chain(s) at TMB branch where they have purchased TMB Smart Life 15/8 from March 15, 2010 onwards.
Mrs.Kanchana concludes, “TMB always strives to create promotional offers to support our financial products that are attractive to various needs of our clients. Hence, TMB believes that both cash back and gold chain offers address these needs of our clients especially during this time. More importantly, this campaign encourages our clients to invest and save for their future financial security as well as for their families through growing returns. Simultaneously, they will enjoy tax saving which eventually, becomes an additional source of income.”
All privileges mentioned above are offered to TMB clients nationwide from October 19 to December 30, 2009. Interested client can inquire further information and a prospectus guidebook at any TMB branch, call TMB Phone Banking 1558 or visit www.tmbbank.com.
Friday, November 13, 2009
TAX BREAKS A BOON FOR ECO CARMAKERS
Tax breaks and subsidies on the purchase of eco-friendly cars after scrapping old vehicles are boosting sales of not only hybrids cars but also fuel-efficient petrol driven models.
Due to the impact of the tax break in promoting the sales of new cars, auto-makers have been working to improve the fuel efficiency of their petrol vehicles to ensure they qualify for the tax-reduction scheme.
In August, Toyota Motor improved the fuel efficiency of some models of its Vitz subcompact car. As a result, it qualified for a purchase and weight tax reduction of 75 per cent, up from the 50 per cent it could previously claim.
Sales of Vitz climbed steeply to 12,731 in September, a 27.7-per-cent rise on the same month last year.
Tax breaks for eco-friendly cars were introduced in April, with a spring 2012 time limit set for the scheme.
Under the scheme, consumers who buy new electric, hybrid and clean diesel cars are exempted from automobile acquisition and weight taxes. But petrol-fuelled car buyers also are entitled to a 50 per cent to 75 per cent tax reduction on cars that meet certain fuel efficiency and emissions criteria.
When a car owner scraps a vehicle that was first registered more than 13 years ago and purchases an eco-friendly car that meets certain criteria, he or she receives a subsidy of 250,000 yen (Bt92,730) if scrapping a family car, including a midsize and subcompact car, and a subsidy of Yen125,000 if scrapping a microcar. The subsidy scheme is set to expire on March 31.
Some Vitz models do not qualify for the tax-reduction scheme. However, for the models that qualify for a 50 per cent or 75 per cent tax reduction, car buyers can save between Yen59,900 and Yen90,000 in acquisition and weight taxes. It gives consumers an incentive to choose certain Vitz models rather than other petrol engined cars that do not qualify for the tax break.
Due to the impact of the tax break in promoting the sales of new cars, auto-makers have been working to improve the fuel efficiency of their petrol vehicles to ensure they qualify for the tax-reduction scheme.
In August, Toyota Motor improved the fuel efficiency of some models of its Vitz subcompact car. As a result, it qualified for a purchase and weight tax reduction of 75 per cent, up from the 50 per cent it could previously claim.
Sales of Vitz climbed steeply to 12,731 in September, a 27.7-per-cent rise on the same month last year.
Tax breaks for eco-friendly cars were introduced in April, with a spring 2012 time limit set for the scheme.
Under the scheme, consumers who buy new electric, hybrid and clean diesel cars are exempted from automobile acquisition and weight taxes. But petrol-fuelled car buyers also are entitled to a 50 per cent to 75 per cent tax reduction on cars that meet certain fuel efficiency and emissions criteria.
When a car owner scraps a vehicle that was first registered more than 13 years ago and purchases an eco-friendly car that meets certain criteria, he or she receives a subsidy of 250,000 yen (Bt92,730) if scrapping a family car, including a midsize and subcompact car, and a subsidy of Yen125,000 if scrapping a microcar. The subsidy scheme is set to expire on March 31.
Some Vitz models do not qualify for the tax-reduction scheme. However, for the models that qualify for a 50 per cent or 75 per cent tax reduction, car buyers can save between Yen59,900 and Yen90,000 in acquisition and weight taxes. It gives consumers an incentive to choose certain Vitz models rather than other petrol engined cars that do not qualify for the tax break.
Sunday, November 8, 2009
OPTIONS WHEN ONE PAYMENT IS TAXABLE TWICE
Many of you may think that today's topic, as suggested by the headline, is a little nonsensical. After all, one payment should never be deemed as taxable income to two separate entities at the same time, should it? Only when it occurs to your organisation will you realise that it is not a joke at all.
If you are not familiar with the franchise agreement framework, you will need to understand the relationship as well as the roles of the franchisor and the franchisee. In brief, an owner of intellectual property rights, a franchisor, will grant a licence to use trademark or trade name, whether registered or unregistered, as well as technique for the production or for the operation of the franchised business, to a franchisee for a certain period of time in exchange for the franchise fees. The franchise fee structure is often divided into an initial franchise fee that is charged at a fixed amount; and a variable fee that is tied to the gross sales revenue of the franchised business.
What is the reason behind this fee structure? The combination between the initial fee and the variable fee is not really groundless, as it is structured to help the franchisee not to incur too large a financial burden at the beginning stage when the business has not yet generated much revenue. In many circumstances, the trademark or service mark is also brand new to consumers in the local market.
To allow the franchised business to grow together with the brand, the initial franchise fee tends to be fixed at a low rate, which means that the franchisor will first contribute intellectual property rights. Certainly, the franchisor, in return, expects higher profits via the variable franchise fee from the growth of the business. This is a typical sharing scheme whereby the franchisor will contribute intellectual property rights and the franchisee will invest the costs and efforts in the local market.
The key that most franchisors expect from franchisees is the effort in marketing and promotional activities in the permitted jurisdiction (e.g. Thailand). If the franchisee does not do marketing activities actively or does not put in sufficient effort, the franchisor can hardly expect good sales volume. In the absence of good sales volume, the variable franchise fee would be marginal.
Thus, it is not a surprise to see the franchisor require the franchisee to incur an amount of marketing expenses in each year, e.g. advertisements on TV, radio, newspapers and magazines. Although the franchisee has the liberty to engage any agencies and freely negotiate advertising fees with agencies or the media, as the intellectual property rights are the property of the franchisor, it is normal that the franchisor will maintain a "control" on such advertisements to ensure that the franchisee will not do anything that may harm the brand image.
At this stage, the franchisor does not directly enjoy any monetary value from the betterment of trademark or trade names at the moment that the franchisee incurs such marketing expenditures. Only when the sales volume goes up will the franchisor receive the higher amount of the variable fee from the franchisee. Thus, no matter how much money the franchisee spends on advertising, if the sales volume is going nowhere, the franchisor won't make money.
In the tax arena, the fees paid by a Thai franchisee to an offshore franchisor, whether a fixed amount or a variable percentage, are always subject to 15% withholding tax. Also, upon payment of the fees, the franchisee will have to remit VAT which is currently imposed at the rate of 7%, to the tax authorities. While this tax liability sounds usual, the Large Taxpayers Office has challenged several franchisees on the grounds that the marketing expenses paid by them to advertising agencies (e.g. advertising agencies, TV, newspapers, media, etc) must be deemed as disguised franchise fees that have to be includable in the tax base.
As the marketing expenses help to publicise the trademark or trade name of the franchisor, and the franchisee is obligated to spend certain amounts in each year and under strict supervision of the franchisor, it can be deemed that the franchisor immediately obtains the monetary benefits in the form of higher value for its brand. Hence, marketing expenses the franchisee paid to agencies are also deemed as royalties subject to withholding tax and VAT.
Now things start to get really interesting from a tax perspective. In two weeks we'll follow up with an explanation of the caveats related to this issue.
If you are not familiar with the franchise agreement framework, you will need to understand the relationship as well as the roles of the franchisor and the franchisee. In brief, an owner of intellectual property rights, a franchisor, will grant a licence to use trademark or trade name, whether registered or unregistered, as well as technique for the production or for the operation of the franchised business, to a franchisee for a certain period of time in exchange for the franchise fees. The franchise fee structure is often divided into an initial franchise fee that is charged at a fixed amount; and a variable fee that is tied to the gross sales revenue of the franchised business.
What is the reason behind this fee structure? The combination between the initial fee and the variable fee is not really groundless, as it is structured to help the franchisee not to incur too large a financial burden at the beginning stage when the business has not yet generated much revenue. In many circumstances, the trademark or service mark is also brand new to consumers in the local market.
To allow the franchised business to grow together with the brand, the initial franchise fee tends to be fixed at a low rate, which means that the franchisor will first contribute intellectual property rights. Certainly, the franchisor, in return, expects higher profits via the variable franchise fee from the growth of the business. This is a typical sharing scheme whereby the franchisor will contribute intellectual property rights and the franchisee will invest the costs and efforts in the local market.
The key that most franchisors expect from franchisees is the effort in marketing and promotional activities in the permitted jurisdiction (e.g. Thailand). If the franchisee does not do marketing activities actively or does not put in sufficient effort, the franchisor can hardly expect good sales volume. In the absence of good sales volume, the variable franchise fee would be marginal.
Thus, it is not a surprise to see the franchisor require the franchisee to incur an amount of marketing expenses in each year, e.g. advertisements on TV, radio, newspapers and magazines. Although the franchisee has the liberty to engage any agencies and freely negotiate advertising fees with agencies or the media, as the intellectual property rights are the property of the franchisor, it is normal that the franchisor will maintain a "control" on such advertisements to ensure that the franchisee will not do anything that may harm the brand image.
At this stage, the franchisor does not directly enjoy any monetary value from the betterment of trademark or trade names at the moment that the franchisee incurs such marketing expenditures. Only when the sales volume goes up will the franchisor receive the higher amount of the variable fee from the franchisee. Thus, no matter how much money the franchisee spends on advertising, if the sales volume is going nowhere, the franchisor won't make money.
In the tax arena, the fees paid by a Thai franchisee to an offshore franchisor, whether a fixed amount or a variable percentage, are always subject to 15% withholding tax. Also, upon payment of the fees, the franchisee will have to remit VAT which is currently imposed at the rate of 7%, to the tax authorities. While this tax liability sounds usual, the Large Taxpayers Office has challenged several franchisees on the grounds that the marketing expenses paid by them to advertising agencies (e.g. advertising agencies, TV, newspapers, media, etc) must be deemed as disguised franchise fees that have to be includable in the tax base.
As the marketing expenses help to publicise the trademark or trade name of the franchisor, and the franchisee is obligated to spend certain amounts in each year and under strict supervision of the franchisor, it can be deemed that the franchisor immediately obtains the monetary benefits in the form of higher value for its brand. Hence, marketing expenses the franchisee paid to agencies are also deemed as royalties subject to withholding tax and VAT.
Now things start to get really interesting from a tax perspective. In two weeks we'll follow up with an explanation of the caveats related to this issue.
THE PROPOSED NEW PROPERTY TAX
We're going to interrupt our series on family law issues because we've received a number of emails asking us to explain about the proposed real estate tax law, formally known as Land and Building Tax Act BE (the Draft Act) pending before Parliament. The Draft Act was prepared by the Ministry of Finance and has been approved by the Council of State.
On Aug 25 this year Korn Chatikavanij, the Minister of Finance, presented the Draft Act to the cabinet. It will probably be brought before Parliament and voted upon this year, though there is, as yet, no date set for a vote. If approved, the Draft Act will be effective in January 2010. The tax rates mentioned below would be phased in over a five-year period.
The tax rate in the Draft Act for residential property on which there is no commercial activity will be 0.1% of the appraised price. The appraised price, incidentally, always includes a value for improvements such as houses or buildings on land. The existing tax scheme is in practice largely ignored. The changes in the Draft Act will, therefore, place an additional cost upon owning residential property.
The Draft Act contains a new tax of 0.5% of the appraised value for undeveloped land held for future commercial purposes or otherwise, doubling every three years, and increasing to as high as 2.0% if the land is not used over a period of years. This will be phased in. Unlike the taxes now on the books, mentioned below, it is anticipated that the new tax, starting at 0.5%, will be enforced, and may encourage holders of large blocks of land to subdivide and sell off.
The real estate taxes that exist now are inconsistent and do not provide the Thai government with what it considers to be adequate revenue. There are two important bases of taxation at present.
First, there is the Act on House and Land Tax, BE 2475 (AD 1932). This law taxes rental income or assessed rental income on property at 12.5%. Property in which the owner resides is exempt from this, however, and revenues under it overlap with the income tax law. Also, compliance is mainly voluntary and doesn't happen much.
Second, there is the Municipality Tax Act, BE 2508 (AD 1965), which applies taxes based on the Appraisal Price Law, BE 2521-2524. The Appraisal Price Law, however, sets values too low to allow for what the government considers adequate revenues. The Municipality Tax Act therefore encourages what is referred to by some in the government of speculative holding of large blocks of land.
So the Draft Act was proposed in place of existing legislation and the above existing acts will be repealed by its effect.
The yearly ceiling or maximum rates multiplied by the appraised value that will be phased in over five years under the Draft Act will be as follows:
0.5% of land and buildings used for commercial purposes.
0.1% of land and buildings used for residential purposes.
0.05% of land used for agricultural purposes.
As mentioned above, for undeveloped land the Draft Act contains an additional ceiling rate of 0.5% of the appraised value, but this rate will double every three years as long as the property is not used until it reaches 2.0% of the appraised value.
As also discussed above, the yearly tax on residential property will, under the Draft Act, eventually be 0.1% of the assessed price. This may work a hardship on the poor. There is presently talk that there may be a royal decree exempting poor people and their properties from the tax.
On Aug 25 this year Korn Chatikavanij, the Minister of Finance, presented the Draft Act to the cabinet. It will probably be brought before Parliament and voted upon this year, though there is, as yet, no date set for a vote. If approved, the Draft Act will be effective in January 2010. The tax rates mentioned below would be phased in over a five-year period.
The tax rate in the Draft Act for residential property on which there is no commercial activity will be 0.1% of the appraised price. The appraised price, incidentally, always includes a value for improvements such as houses or buildings on land. The existing tax scheme is in practice largely ignored. The changes in the Draft Act will, therefore, place an additional cost upon owning residential property.
The Draft Act contains a new tax of 0.5% of the appraised value for undeveloped land held for future commercial purposes or otherwise, doubling every three years, and increasing to as high as 2.0% if the land is not used over a period of years. This will be phased in. Unlike the taxes now on the books, mentioned below, it is anticipated that the new tax, starting at 0.5%, will be enforced, and may encourage holders of large blocks of land to subdivide and sell off.
The real estate taxes that exist now are inconsistent and do not provide the Thai government with what it considers to be adequate revenue. There are two important bases of taxation at present.
First, there is the Act on House and Land Tax, BE 2475 (AD 1932). This law taxes rental income or assessed rental income on property at 12.5%. Property in which the owner resides is exempt from this, however, and revenues under it overlap with the income tax law. Also, compliance is mainly voluntary and doesn't happen much.
Second, there is the Municipality Tax Act, BE 2508 (AD 1965), which applies taxes based on the Appraisal Price Law, BE 2521-2524. The Appraisal Price Law, however, sets values too low to allow for what the government considers adequate revenues. The Municipality Tax Act therefore encourages what is referred to by some in the government of speculative holding of large blocks of land.
So the Draft Act was proposed in place of existing legislation and the above existing acts will be repealed by its effect.
The yearly ceiling or maximum rates multiplied by the appraised value that will be phased in over five years under the Draft Act will be as follows:
0.5% of land and buildings used for commercial purposes.
0.1% of land and buildings used for residential purposes.
0.05% of land used for agricultural purposes.
As mentioned above, for undeveloped land the Draft Act contains an additional ceiling rate of 0.5% of the appraised value, but this rate will double every three years as long as the property is not used until it reaches 2.0% of the appraised value.
As also discussed above, the yearly tax on residential property will, under the Draft Act, eventually be 0.1% of the assessed price. This may work a hardship on the poor. There is presently talk that there may be a royal decree exempting poor people and their properties from the tax.
Saturday, October 31, 2009
Levelling the landscape
The Land and Property Tax Act is intended to make taxation fairer and increase land utilisation but the new regime will require further revision and greater clarity before becoming effective on Jan 1,2010.
According to the Fiscal Policy Office (FPO), the current property tax system is flawed.
For example, the building and land tax is calculated from annual rents which depends on contracts between tenants and landlords, who often register lower rents than they collect to avoid tax.
The current building and land tax rate is also 12.5% of annual rent - or one-and-a-half-month's rent - which is too high and tempts landlords to avoid paying tax.
For a building used by a landlord for his own commercial purpose or not for rent, the local authority estimates an annual charge.
Meanwhile, the local development tax rate varies according to the value of the land, with higher-priced land being taxed at a lower rate. The tax is calculated from land prices in 1978-81, which are outdated and result in a low tax rate.
Tax is also collected on very few land plots due to exemptions and deductions for land of between 50 square wah and five rai on which owners reside.
"Land taxation under the new act will be fair for everyone. The act will increase the efficiency of land utilisation,"said Jaroonsri Chyehard, director of the Local Tax and Non-tax Policy Division at the Tax Policy Bureau of the FPO.
The tax base will be the total value of land and buildings, including other property adjoining to that land or building,according to the FPO. The tax base will be cut by 1% a year, up to a maximum reduction of 10%, for property maintenance.
Deductions and exemptions will also be given for damage to land and buildings from natural disasters such as floods.Tax exemptions will apply for land and buildings for residential and agricultural use, the value of which must not exceed a legal limit.
The tax base for land without buildings will be calculated from the Treasury De-partment's land appraisals. For land and buildings, the tax base will be calculated from appraised land prices and appraised building prices.
Three tax rates will be introduced: a general rate for land and buildings of not more than 0.5% of the tax base; a residential rate for non-commercial land and building of not more than 0.1%;and an agricultural rate of not more than 0.05%.
Within these limits, local administrations have the authority to set the rate and to add new categories of rate.
On abandoned land, the tax will be charged in the first three years at up to 0.5% of the tax base. But if that land remains unused, from the fourth year onwards the tax rate will double every three years to a maximum of 2% of the tax base.
"This aims to prevent land stockpiling.It will be a measure to encourage landlords with many land plots to rent them out or sell. Land plot prices may become lower," said Ms Jaroonsri.
She suggested landlords start surveying their own assets and consider how to use assets to generate worthwhile returns.
"They [landlords] should seek ways to benefit from the empty plots on which they will pay higher tax than before.They might be used to hold fresh markets or whatever makes them worth the tax."
Three groups who never paid or underpaid Land and Building Tax would be affected by the new act, she said. These are current taxpayers paying less than the rate they should; owners of land plots sized between 50 square wah and five rai, the minimum size for paying tax under the current act; and landlords who push the tax burden onto their tenants.
Tax should be paid by April of each year. Taxpayers may pay by installments set by the ministry but if they fail to pay within the required period, they lose the right to pay by installments and must pay an additional 1% a month of the unpaid amount.
But taxpayers have the right to appeal their rate to the local administration within 30 days.
"There will be a grace period of two years to allow agencies involved to prepare for the new act," she said.
The Lands Department will make a nationwide digital map to match land title deeds and land price appraisals being done by the Treasury Department.So far, the department has appraised only 6 million out of 31 million plots.
At the same time, local administrations will survey lands and buildings in their areas, to establish each taxpayer's lands and buildings and calculate their tax liabilities.
To reduce the burden on those who have never paid Building and Land Tax or Local Development Tax - most of whom are homeowners - the rate will be 50% of the normal rate in the first year,75% in the second year and the full amount from the third year.
Taxpayers who currently pay Building and Land Tax and Local Development Tax will pay a higher rate after the new act comes into effect, the rate will be 75% of the tax in the first year,50% in the second year and the full amount from the third year onward.
"We are concerned about duplications of taxable areas," said Somchao Tanthathoedtham, managing director of the listed developer NC Housing Plc.
"For example, homeowners in a gated development normally pay a common area fee, part of which is used for facilities maintenance. Under the new tax act,they will also pay property tax to local administrative organisations that are not responsible for facilities in their village."
Atip Bijanonda, president of the Thai Condominium Association, said there were likely to be some overlaps between the new tax system and other taxes,which might increase burdens on asset owners.
"The transfer fee should be a fixed rate, not percentage-based," he said.
He added that clarity is needed for tax deduction and tax payment systems,which should have a convenient payment system for taxpayers, especially those owning many plots of land countrywide.
Appraisals of building values by local administrative official should be fair to everyone, he added.
Supalakana Pinitpuvadol, a law professor at Chulalongkorn University, has expressed concern that some terms in the new act - such as "land","building"or "other property"- should be adequately defined for general understanding and clear legislative interpretation.
For instance, regulations that help reduce the tax burden should be clear.Depreciation should be for buildings but not for land - which generally ap-preciates - and maintenance fees should be based on actual payments or an estimation.
The FPO will revise tax structures and examine the duplication of other property taxes such as property transfer fees and special business tax, said Ms Jaroonsri.It will also consider the case of gated housing villages where homeowners are responsible for utilities.
"The Land and Property Tax Act will improve the property ownership tax system, promote decentralising to local administrative organisations, reduce hoarding of land for speculation and generate more income for local administrative organisations."
Last year, local administrations generated an income of 35.22 billion baht but received 193.67 billion baht from the government and a subsidy of 147.84 billion baht.
"With the taxation system under the new act, local administrative organisations' revenue will increase to 90 billion baht from the current 20 billion baht they gain from property-related tax,"she added.
Sopon Pornchokchai, president of the Thai Appraisal Foundation, said revenue would be collected directly for local development under the new act and could be used for utilities and education, which in turn would increase the value of property in that area.
"The more tax a local authority can collect, the more development it will make," he said."It's like the more you give [pay tax], the more you get [higher property value]."
Even a large landlord owning a property worth millions of baht is likely to benefit from higher land value if the taxes he pays fund local development.
"There will be no chance of leakage or corruption by big politicians or government officials as tax collection and spending are within local areas and will not enter the central government's coffers," he said.
According to the Fiscal Policy Office (FPO), the current property tax system is flawed.
For example, the building and land tax is calculated from annual rents which depends on contracts between tenants and landlords, who often register lower rents than they collect to avoid tax.
The current building and land tax rate is also 12.5% of annual rent - or one-and-a-half-month's rent - which is too high and tempts landlords to avoid paying tax.
For a building used by a landlord for his own commercial purpose or not for rent, the local authority estimates an annual charge.
Meanwhile, the local development tax rate varies according to the value of the land, with higher-priced land being taxed at a lower rate. The tax is calculated from land prices in 1978-81, which are outdated and result in a low tax rate.
Tax is also collected on very few land plots due to exemptions and deductions for land of between 50 square wah and five rai on which owners reside.
"Land taxation under the new act will be fair for everyone. The act will increase the efficiency of land utilisation,"said Jaroonsri Chyehard, director of the Local Tax and Non-tax Policy Division at the Tax Policy Bureau of the FPO.
The tax base will be the total value of land and buildings, including other property adjoining to that land or building,according to the FPO. The tax base will be cut by 1% a year, up to a maximum reduction of 10%, for property maintenance.
Deductions and exemptions will also be given for damage to land and buildings from natural disasters such as floods.Tax exemptions will apply for land and buildings for residential and agricultural use, the value of which must not exceed a legal limit.
The tax base for land without buildings will be calculated from the Treasury De-partment's land appraisals. For land and buildings, the tax base will be calculated from appraised land prices and appraised building prices.
Three tax rates will be introduced: a general rate for land and buildings of not more than 0.5% of the tax base; a residential rate for non-commercial land and building of not more than 0.1%;and an agricultural rate of not more than 0.05%.
Within these limits, local administrations have the authority to set the rate and to add new categories of rate.
On abandoned land, the tax will be charged in the first three years at up to 0.5% of the tax base. But if that land remains unused, from the fourth year onwards the tax rate will double every three years to a maximum of 2% of the tax base.
"This aims to prevent land stockpiling.It will be a measure to encourage landlords with many land plots to rent them out or sell. Land plot prices may become lower," said Ms Jaroonsri.
She suggested landlords start surveying their own assets and consider how to use assets to generate worthwhile returns.
"They [landlords] should seek ways to benefit from the empty plots on which they will pay higher tax than before.They might be used to hold fresh markets or whatever makes them worth the tax."
Three groups who never paid or underpaid Land and Building Tax would be affected by the new act, she said. These are current taxpayers paying less than the rate they should; owners of land plots sized between 50 square wah and five rai, the minimum size for paying tax under the current act; and landlords who push the tax burden onto their tenants.
Tax should be paid by April of each year. Taxpayers may pay by installments set by the ministry but if they fail to pay within the required period, they lose the right to pay by installments and must pay an additional 1% a month of the unpaid amount.
But taxpayers have the right to appeal their rate to the local administration within 30 days.
"There will be a grace period of two years to allow agencies involved to prepare for the new act," she said.
The Lands Department will make a nationwide digital map to match land title deeds and land price appraisals being done by the Treasury Department.So far, the department has appraised only 6 million out of 31 million plots.
At the same time, local administrations will survey lands and buildings in their areas, to establish each taxpayer's lands and buildings and calculate their tax liabilities.
To reduce the burden on those who have never paid Building and Land Tax or Local Development Tax - most of whom are homeowners - the rate will be 50% of the normal rate in the first year,75% in the second year and the full amount from the third year.
Taxpayers who currently pay Building and Land Tax and Local Development Tax will pay a higher rate after the new act comes into effect, the rate will be 75% of the tax in the first year,50% in the second year and the full amount from the third year onward.
"We are concerned about duplications of taxable areas," said Somchao Tanthathoedtham, managing director of the listed developer NC Housing Plc.
"For example, homeowners in a gated development normally pay a common area fee, part of which is used for facilities maintenance. Under the new tax act,they will also pay property tax to local administrative organisations that are not responsible for facilities in their village."
Atip Bijanonda, president of the Thai Condominium Association, said there were likely to be some overlaps between the new tax system and other taxes,which might increase burdens on asset owners.
"The transfer fee should be a fixed rate, not percentage-based," he said.
He added that clarity is needed for tax deduction and tax payment systems,which should have a convenient payment system for taxpayers, especially those owning many plots of land countrywide.
Appraisals of building values by local administrative official should be fair to everyone, he added.
Supalakana Pinitpuvadol, a law professor at Chulalongkorn University, has expressed concern that some terms in the new act - such as "land","building"or "other property"- should be adequately defined for general understanding and clear legislative interpretation.
For instance, regulations that help reduce the tax burden should be clear.Depreciation should be for buildings but not for land - which generally ap-preciates - and maintenance fees should be based on actual payments or an estimation.
The FPO will revise tax structures and examine the duplication of other property taxes such as property transfer fees and special business tax, said Ms Jaroonsri.It will also consider the case of gated housing villages where homeowners are responsible for utilities.
"The Land and Property Tax Act will improve the property ownership tax system, promote decentralising to local administrative organisations, reduce hoarding of land for speculation and generate more income for local administrative organisations."
Last year, local administrations generated an income of 35.22 billion baht but received 193.67 billion baht from the government and a subsidy of 147.84 billion baht.
"With the taxation system under the new act, local administrative organisations' revenue will increase to 90 billion baht from the current 20 billion baht they gain from property-related tax,"she added.
Sopon Pornchokchai, president of the Thai Appraisal Foundation, said revenue would be collected directly for local development under the new act and could be used for utilities and education, which in turn would increase the value of property in that area.
"The more tax a local authority can collect, the more development it will make," he said."It's like the more you give [pay tax], the more you get [higher property value]."
Even a large landlord owning a property worth millions of baht is likely to benefit from higher land value if the taxes he pays fund local development.
"There will be no chance of leakage or corruption by big politicians or government officials as tax collection and spending are within local areas and will not enter the central government's coffers," he said.
RBS eyes plans to offload branches
The Royal Bank of Scotland (RBS) is considering a British government-backed plan to sell of more than 300 high street branches to satisfy EU competition authorities, the Financial Times said yesterday.
RBS, which is 70 per cent owned by the taxpayer after it was saved from collapse by a government bail-out last year, told the newspaper it was "working towards a solution with the European Commission".
Officials close to the negotiations said the plan was well advanced. The plan hinges on the EU's concerns that RBS has a 30-per-cent share of the small business banking market in Britian. Brussels wants to see RBS's operations in the sector reduced by 10 per cent.
The Scottish bank could achieve this by disposing of its 312 RBS-branded branches in England and Wales, which mostly serve its one million small corporate customers.
RBS, which is 70 per cent owned by the taxpayer after it was saved from collapse by a government bail-out last year, told the newspaper it was "working towards a solution with the European Commission".
Officials close to the negotiations said the plan was well advanced. The plan hinges on the EU's concerns that RBS has a 30-per-cent share of the small business banking market in Britian. Brussels wants to see RBS's operations in the sector reduced by 10 per cent.
The Scottish bank could achieve this by disposing of its 312 RBS-branded branches in England and Wales, which mostly serve its one million small corporate customers.
CALIFORNIA'S GOVERNOR TO THE RESCUE
Terminator-turned-governor Arnold Schwarzenegger, who has played the hero in many movies, will now try to rescue California from its dire financial straits.
Schwarzenegger will soon seel Build America Bonds to individuals to raise money.
California, suffering from record unmployment and the lowest credit rating of any state, plans to borrow US$4.5 billion (Bt151 billion) this week for schools, parks and hospitals after municipal bond yields fell to a 42-year low.
Bloomberg reports worth of federally subsidised, taxable will sell $3.2 billion worth of federally subsidised, taxable Build America Bonds and $1.3 billion worth of tax-exempt debt, the biggest municipal financing of the week. While yields on 30-year Build America securities that California sold in April fell to 6.68 percent last Thursday, from 7.43 per cent when they were sold, the rate remains 0.53-percent-age-point more than the average US corporate note due in more than 15 years, Bank of America's Merrill Lynch & Co indexes show.
California is reaping the benefits of the highest returns on tax-exempt debt since 2000 even as it projects a deficit of $38 billion over the next three years. Pacific Investment Management's Bill Gross said the state might lack the "discipline" to plug the gap.
"I'm not a strong buyer at these levels," said Ken Naehu, who oversees $2.5 billion in bods as head of fixed income at Bel Air Investment Advisers in Los Angeles.
"Investors should know that the issues and problems with the state's finances have not been resolved."
California's record 12.2-per-cent unemployment rate in August compared with 7.6 per cent in the same period last year and 5.5 per cent two years earlier. The Labour Department last week reported the nation's unemployment rate reached 9.8 per cent last month.
Tax revenue has missed Governor Schwarzenegger's Budget Office projections, falling 1.3 per cent from forecasts when the state legislature approved the present spending plan totalling about $85 billion in July.
California will offer Build America Bonds to individuals today and tomorrow and to institutions on Thursday, said Treasury spokesman Tom Dresslar. The last time it sold long-term securities was April's $6.85 - billion deal.
The state was among the first to sell Build America Bonds, which are taxable securities.
Schwarzenegger will soon seel Build America Bonds to individuals to raise money.
California, suffering from record unmployment and the lowest credit rating of any state, plans to borrow US$4.5 billion (Bt151 billion) this week for schools, parks and hospitals after municipal bond yields fell to a 42-year low.
Bloomberg reports worth of federally subsidised, taxable will sell $3.2 billion worth of federally subsidised, taxable Build America Bonds and $1.3 billion worth of tax-exempt debt, the biggest municipal financing of the week. While yields on 30-year Build America securities that California sold in April fell to 6.68 percent last Thursday, from 7.43 per cent when they were sold, the rate remains 0.53-percent-age-point more than the average US corporate note due in more than 15 years, Bank of America's Merrill Lynch & Co indexes show.
California is reaping the benefits of the highest returns on tax-exempt debt since 2000 even as it projects a deficit of $38 billion over the next three years. Pacific Investment Management's Bill Gross said the state might lack the "discipline" to plug the gap.
"I'm not a strong buyer at these levels," said Ken Naehu, who oversees $2.5 billion in bods as head of fixed income at Bel Air Investment Advisers in Los Angeles.
"Investors should know that the issues and problems with the state's finances have not been resolved."
California's record 12.2-per-cent unemployment rate in August compared with 7.6 per cent in the same period last year and 5.5 per cent two years earlier. The Labour Department last week reported the nation's unemployment rate reached 9.8 per cent last month.
Tax revenue has missed Governor Schwarzenegger's Budget Office projections, falling 1.3 per cent from forecasts when the state legislature approved the present spending plan totalling about $85 billion in July.
California will offer Build America Bonds to individuals today and tomorrow and to institutions on Thursday, said Treasury spokesman Tom Dresslar. The last time it sold long-term securities was April's $6.85 - billion deal.
The state was among the first to sell Build America Bonds, which are taxable securities.
Tuesday, October 20, 2009
PRIVATE SECTOR WANTS RAYONG A SPECIAL ZONE
The private sector today will propose the government turn Rayong province into a special economic zone to improve budget allocation for its industrialised areas, including Map Ta Phut, as well as the payment of an environment tax to assure further industrial development.
The first proposal was agreed upon yesterday by the Joint Privaate Committee on Commerce, Industries and Banking.
At the meeting, Suthi Atchasai, coordinator of a public network on the Eastern Seaboard, which is one of the main forces blocking further industrial development in the province, said there must be a clear definition of what constitutes a special economic zone.
"Every party, including local communities, should be able to participate in the discussion of this issue. Importantly, this proposal must not have a hidden agenda benefiting any single party and must clearly keep in line with the Constitution's Article 67", he said.
PTT Aromatics and Refining president and CEO Chainoi Puankosoom said the proposal would allow non-Rayong residents working in the area to register as provincial citizens. Then more budget would go to the province, improving the standard of living as a whole.
"We believe people today are not so concerned about the polluted environment, but they are worried more about their low standard of living, such as poor management of waste treatment or utilities," he said.
Federation of Thai Industries chairman Santi Vilassakdanont said the proposal would be tabled at the Public-Private Partnership meeting today.
Meanwhile, the private sector will also propose collection of an environment tax to its government counterparts, on condition that the money generated go to the areas where plants are located.
"We want to express that we as concerned about the environment as other parties. We are willing to follow the laws and regulations, as well as set up a Bt17-billion fund to improve the environment from 2007-11," he said.
He said the private sector would reiterate to the government that it fully supported the idea of an "eco-industrial town" as a long-term goal out of concern from local and foreign investors that industrial development in Thailand could be discontinued.
"If this conflict continues, it's a great risk. So far, I have not heard about firms moving their investment to other countries, but it may happen soon," said Japanese Chamber of Commerce vice chairman Fukujiro Yamabe.
He said it was difficult for Japanese companies in Thailand to explain the court's recent injunction against 76 industrial projects to parent companies. Therefore, the government should speed up resolution of the problem, in order to maintain their confidence in running businesses here.
"It will be too long for investors, should this issue be prolonged until next year," he added.
Nandor von der Luehe, chairman of the Joint Foreign Chambers of Commerce in Thailand, said investors fully understood the importance of environmemtal protection. He believes Thailand has good environmental-protection laws that meet world-class tandards and that most of the suspended projects could pass those standards.
Therefore, the government should take the shorted time to move the situation from the current murky state, in order to restore investor confidence.
"We would like to envourage the government to allocate more money to local communities, in order to improve people's quality of life," von der Luehe added.
Notably, the conflict has delayed some refiners' investment plans to improve their oil quality to meet Euro IV emission standards.
The first proposal was agreed upon yesterday by the Joint Privaate Committee on Commerce, Industries and Banking.
At the meeting, Suthi Atchasai, coordinator of a public network on the Eastern Seaboard, which is one of the main forces blocking further industrial development in the province, said there must be a clear definition of what constitutes a special economic zone.
"Every party, including local communities, should be able to participate in the discussion of this issue. Importantly, this proposal must not have a hidden agenda benefiting any single party and must clearly keep in line with the Constitution's Article 67", he said.
PTT Aromatics and Refining president and CEO Chainoi Puankosoom said the proposal would allow non-Rayong residents working in the area to register as provincial citizens. Then more budget would go to the province, improving the standard of living as a whole.
"We believe people today are not so concerned about the polluted environment, but they are worried more about their low standard of living, such as poor management of waste treatment or utilities," he said.
Federation of Thai Industries chairman Santi Vilassakdanont said the proposal would be tabled at the Public-Private Partnership meeting today.
Meanwhile, the private sector will also propose collection of an environment tax to its government counterparts, on condition that the money generated go to the areas where plants are located.
"We want to express that we as concerned about the environment as other parties. We are willing to follow the laws and regulations, as well as set up a Bt17-billion fund to improve the environment from 2007-11," he said.
He said the private sector would reiterate to the government that it fully supported the idea of an "eco-industrial town" as a long-term goal out of concern from local and foreign investors that industrial development in Thailand could be discontinued.
"If this conflict continues, it's a great risk. So far, I have not heard about firms moving their investment to other countries, but it may happen soon," said Japanese Chamber of Commerce vice chairman Fukujiro Yamabe.
He said it was difficult for Japanese companies in Thailand to explain the court's recent injunction against 76 industrial projects to parent companies. Therefore, the government should speed up resolution of the problem, in order to maintain their confidence in running businesses here.
"It will be too long for investors, should this issue be prolonged until next year," he added.
Nandor von der Luehe, chairman of the Joint Foreign Chambers of Commerce in Thailand, said investors fully understood the importance of environmemtal protection. He believes Thailand has good environmental-protection laws that meet world-class tandards and that most of the suspended projects could pass those standards.
Therefore, the government should take the shorted time to move the situation from the current murky state, in order to restore investor confidence.
"We would like to envourage the government to allocate more money to local communities, in order to improve people's quality of life," von der Luehe added.
Notably, the conflict has delayed some refiners' investment plans to improve their oil quality to meet Euro IV emission standards.
Saturday, October 17, 2009
NEW EXCISE CHIEF VOWS WIDESPREAD TAX REFORM
The new head of the Excise Department has pledged to reform liquor, beer, oil and automobile taxes in response to complaints by producers and independent academics of obscure rules and unfair treatment among rivals.
Areepong Bhoochaoom, newly appointed director-general of the Excise Department, yesterday said he would give priority to solving issues related to tax collection on alcohol beverages, oil and cars. A committee has been set up to find solutions within two months, he said.
Beer and liquor producers have long complained that the department has not treated them equally, accusing the department of favour one giant producer resulting in lack of a level playing field.
Nipon Poapongsakorn, president of the Thailand Research Development Institution, an independent think-tank, also previously criticised the department and the Finance Ministry for their "unjust" excise tax system. Nipon currently leads a research team studying the whole structure of excise taxes.
Some experts also suggested the tax rate should be based on alcohol content rather price.
Areepong said the department might change the way its calculated car taxes from a rate based on factory prices to retail prices.
The department may also require softdrink manufacturers and oil traders to provide online information in the same way that alcohol producers send online information about their production to the department.
The department will make clear rules as to who must pay nightclub services tax, he pledged.
It will also launch a tax reform master plan this year, Areepong said.
The reform will aim to make taxes simple and justice and will not cause multinational firms to relocate their factories out of Thailand, he said.
In the short run, the department will not increase tax rates, but will improve tax collection efficiency, he added.
The agency plans to collect excise tax worth Bt291 billion for the current fiscal year (October 2009 to September 2010).
Areepong wants to beat the target by Bt20 to Bt30 billion.
The department is under pressure to collect more taxes as most tariffs under the Asean free trade agreement will be cut to zero next year.
Areepong Bhoochaoom, newly appointed director-general of the Excise Department, yesterday said he would give priority to solving issues related to tax collection on alcohol beverages, oil and cars. A committee has been set up to find solutions within two months, he said.
Beer and liquor producers have long complained that the department has not treated them equally, accusing the department of favour one giant producer resulting in lack of a level playing field.
Nipon Poapongsakorn, president of the Thailand Research Development Institution, an independent think-tank, also previously criticised the department and the Finance Ministry for their "unjust" excise tax system. Nipon currently leads a research team studying the whole structure of excise taxes.
Some experts also suggested the tax rate should be based on alcohol content rather price.
Areepong said the department might change the way its calculated car taxes from a rate based on factory prices to retail prices.
The department may also require softdrink manufacturers and oil traders to provide online information in the same way that alcohol producers send online information about their production to the department.
The department will make clear rules as to who must pay nightclub services tax, he pledged.
It will also launch a tax reform master plan this year, Areepong said.
The reform will aim to make taxes simple and justice and will not cause multinational firms to relocate their factories out of Thailand, he said.
In the short run, the department will not increase tax rates, but will improve tax collection efficiency, he added.
The agency plans to collect excise tax worth Bt291 billion for the current fiscal year (October 2009 to September 2010).
Areepong wants to beat the target by Bt20 to Bt30 billion.
The department is under pressure to collect more taxes as most tariffs under the Asean free trade agreement will be cut to zero next year.
Tuesday, October 13, 2009
BOT URGED TO FACILITATE MONEY FLOW FOR MULTINATIONALS
The Finance Ministry will ask the Bank of Thailand (BOT) to loosen regulations for multinational firms to enable them to bring money into the country or repatriate it in a bid to promote the country as their regional headquarters.
Deputy Finance Minister Pradit Phataraprasit said that he would consult with the central bank later.
Winai Wittawatkaravet, directorgeneral of the Revenue Department, said the department would not offer more tax incentives but would relax tax regulations for large firms.
Earlier, the ministry had cut corporate income tax to 10 per cent from the regular 30 per cent for companies establishing regional operating headquarters in Thailand.
Finance Minister Korn Chatikavanij yesterday said he will today submit to the Cabinet a proposal to cut the excise tax rate on Thai traditional spas to zero from 10 per cent.
"I believe the Cabinet will agree to support the tourism industry," he said. Currently the Excise Department collects tax from about 1,000 spa operators but tax collection is less than Bt1 billion annually, said Korn.
The spa business has long been asking for a tax cut. Spa businesses operating in hospitals or temples would benefit from the rate reduction.
However, massage parlours will still be taxed 10 per cent, said Korn.
Meanwhile, Winai said his department will keep a close eye on construction companies to prevent them from dodging tax.
He warned that those who evade tax would be punished and accounting firms that help them to avoid tax payment would also be penalised.
He said the department had found that some accounting firms had helped some construction firms to evade tax by making a false report report on expenditures due to the cost of oil.
"We will not just look at receipts but we will dig into the reasonable cost of oil in the construction businesses," he said.
Finance Minister Korn Chatikavanij yesterday said he will today submit to the Cabinet a proposal to cut the excise tax rate on Thai traditional spas to zero from 10 per cent.
Deputy Finance Minister Pradit Phataraprasit said that he would consult with the central bank later.
Winai Wittawatkaravet, directorgeneral of the Revenue Department, said the department would not offer more tax incentives but would relax tax regulations for large firms.
Earlier, the ministry had cut corporate income tax to 10 per cent from the regular 30 per cent for companies establishing regional operating headquarters in Thailand.
Finance Minister Korn Chatikavanij yesterday said he will today submit to the Cabinet a proposal to cut the excise tax rate on Thai traditional spas to zero from 10 per cent.
"I believe the Cabinet will agree to support the tourism industry," he said. Currently the Excise Department collects tax from about 1,000 spa operators but tax collection is less than Bt1 billion annually, said Korn.
The spa business has long been asking for a tax cut. Spa businesses operating in hospitals or temples would benefit from the rate reduction.
However, massage parlours will still be taxed 10 per cent, said Korn.
Meanwhile, Winai said his department will keep a close eye on construction companies to prevent them from dodging tax.
He warned that those who evade tax would be punished and accounting firms that help them to avoid tax payment would also be penalised.
He said the department had found that some accounting firms had helped some construction firms to evade tax by making a false report report on expenditures due to the cost of oil.
"We will not just look at receipts but we will dig into the reasonable cost of oil in the construction businesses," he said.
Finance Minister Korn Chatikavanij yesterday said he will today submit to the Cabinet a proposal to cut the excise tax rate on Thai traditional spas to zero from 10 per cent.
Monday, October 12, 2009
Alcohol tax revamp urged
Excise taxes for alcoholic beverages should be overhauled to be strictly based on alcoholic content, according to Satit Rungkasiri, director-general of the Fiscal Policy Office.
Shifting tax calculations to be based on degree rather than quantity is in keeping with the idea that beverages with higher alcoholic content should pay higher tax, considering the higher potential cost to public health and society.
Mr Satit also said Thailand was unique in charging excise taxes for beers based on a three-category system: premium,standard and economy."No other country uses the system we use for beers. It only introduces complications in calculating taxes."
But past efforts to overhaul the tax structure for beer, wine, liquors and spirits have mostly failed, in part to heavy lobbying by domestic producers.
Excise taxes for beer are currently calculated as 55% of the ex-factory price or 100 baht per litre-equivalent of 100%alcohol, whichever is higher. In general,charging based on alcoholic content will bring the government more money.
The three-category structure is complicated as each has its own reference for ex-factory prices, with economy the lowest and premium the highest. This is despite the fact that production costs for beer differ relatively little.
Past efforts to link tax rates to alcohol content have also been impeded by government policies to assist community producers of white spirits, which generally have more alcohol than imports.
Shifting tax calculations to be based on degree rather than quantity is in keeping with the idea that beverages with higher alcoholic content should pay higher tax, considering the higher potential cost to public health and society.
Mr Satit also said Thailand was unique in charging excise taxes for beers based on a three-category system: premium,standard and economy."No other country uses the system we use for beers. It only introduces complications in calculating taxes."
But past efforts to overhaul the tax structure for beer, wine, liquors and spirits have mostly failed, in part to heavy lobbying by domestic producers.
Excise taxes for beer are currently calculated as 55% of the ex-factory price or 100 baht per litre-equivalent of 100%alcohol, whichever is higher. In general,charging based on alcoholic content will bring the government more money.
The three-category structure is complicated as each has its own reference for ex-factory prices, with economy the lowest and premium the highest. This is despite the fact that production costs for beer differ relatively little.
Past efforts to link tax rates to alcohol content have also been impeded by government policies to assist community producers of white spirits, which generally have more alcohol than imports.
Sunday, October 11, 2009
TAX INCENTIVES MULLED FOR FOREIGN EXPERTS
The Finance Ministry is considering whether to offer tax incentives to attract foreign specialists to work in Thailand, as part of an attempt to promote value-added industries and services.
In order to promote financialmarket development, tax incentives will be also given to banks and insurance firms that merge.
Satit Rungkasiri, newly appointed director-general of the Fiscal Policy Office, yesterday said he had assigned tax officials to identify incentives to lure highly skilled foreign workers to create know-how in the Kingdom.
This is one of several tasks he outlined as the new head of the office.
"If we can invite 10,000 specialists from abroad, they may be able to make a [more] significant contribution to the economy than a million low-skilled labourers imported from neighbouring countries," said Satit.
He said the office would work with other government agencies such as the Interior Ministry and Foreign Ministry to facilitate such an initiative.
Foreign workers often complain about the difficulty of obtaining work permits, he added.
MERGERS AND ACQUISITIONS
Tax incentives will cover research and development activities by both local citiznes and foreigners, he said.
The Finance Ministry is considering tax incentives for mergers and acquisitions among insurance firms and banks, as part of capital-market development, he said.
M&A activity currently faces a tax disincetive, in that the reserves of a bank or insurance firm are counted as income and the new post-M&A entity to pay tax on this amount.
The ministry is planning to eliminate this problem, he said.
It will also consolidate fiscal policies by creating a new body chaired by the finance minister to oversee local and central government expenditures, revenues, activities of off-budget funds as well as public-private partnership spending.
The move is aimed at creating greater transparency and prudence in the fical system. The fiscal bill will soon be submitted to the Cabinet for approval, Satit said.
In addition, Finance Minister Korn Chatikavanij has reportedly signed the draft law on the establishment of a national pension fund, which has been listed for Cabinet consideration.
In order to promote financialmarket development, tax incentives will be also given to banks and insurance firms that merge.
Satit Rungkasiri, newly appointed director-general of the Fiscal Policy Office, yesterday said he had assigned tax officials to identify incentives to lure highly skilled foreign workers to create know-how in the Kingdom.
This is one of several tasks he outlined as the new head of the office.
"If we can invite 10,000 specialists from abroad, they may be able to make a [more] significant contribution to the economy than a million low-skilled labourers imported from neighbouring countries," said Satit.
He said the office would work with other government agencies such as the Interior Ministry and Foreign Ministry to facilitate such an initiative.
Foreign workers often complain about the difficulty of obtaining work permits, he added.
MERGERS AND ACQUISITIONS
Tax incentives will cover research and development activities by both local citiznes and foreigners, he said.
The Finance Ministry is considering tax incentives for mergers and acquisitions among insurance firms and banks, as part of capital-market development, he said.
M&A activity currently faces a tax disincetive, in that the reserves of a bank or insurance firm are counted as income and the new post-M&A entity to pay tax on this amount.
The ministry is planning to eliminate this problem, he said.
It will also consolidate fiscal policies by creating a new body chaired by the finance minister to oversee local and central government expenditures, revenues, activities of off-budget funds as well as public-private partnership spending.
The move is aimed at creating greater transparency and prudence in the fical system. The fiscal bill will soon be submitted to the Cabinet for approval, Satit said.
In addition, Finance Minister Korn Chatikavanij has reportedly signed the draft law on the establishment of a national pension fund, which has been listed for Cabinet consideration.
Friday, September 25, 2009
LGT faces lawsuit from German tax evader
A German tax evader is suing the Liechtenstein bank LGT, claiming the institution failed to inform him that his supposedly confidential financial data was in the hands of the authorities.
The Liechtenstein Regional Court confirmed yesterday a report in Financial Times Deutschland that the civil proceedings would be heard next in Vaduz,the capital of the Alpine principality.
The real estate developer wants 13 million in damages, claiming the bank should have told him the German government had incriminating information against him. He said that had he known of the impending proceedings against him, he would have come clean to the tax authorities and avoided penalties.
The man, aged 66 at the time, was given a suspended prison sentence and a fine of 7.5 million for tax evasion.In 2008, Germany's intelligence services purchased a computer disk from a former LGT employee, which contained confidential data on hundreds of clients of several nationalities, many of whom were evading taxes.
Liechtenstein has strict banking confidentiality rules, though these are in the process of being relaxed owing to international pressure against so-called tax havens.
The Liechtenstein Regional Court confirmed yesterday a report in Financial Times Deutschland that the civil proceedings would be heard next in Vaduz,the capital of the Alpine principality.
The real estate developer wants 13 million in damages, claiming the bank should have told him the German government had incriminating information against him. He said that had he known of the impending proceedings against him, he would have come clean to the tax authorities and avoided penalties.
The man, aged 66 at the time, was given a suspended prison sentence and a fine of 7.5 million for tax evasion.In 2008, Germany's intelligence services purchased a computer disk from a former LGT employee, which contained confidential data on hundreds of clients of several nationalities, many of whom were evading taxes.
Liechtenstein has strict banking confidentiality rules, though these are in the process of being relaxed owing to international pressure against so-called tax havens.
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