BANGKOK, Dec 3 (Reuters): Thailand's re-imposition of a financial transaction tax on share sales on the Thai bourse will create fairness in tax collection and reduce inequality, and should not have a big impact on the market, the finance minister has announced.
The tax, which had been waived for more than three decades, was approved by the cabinet on Tuesday, and Arkhom Termpittayapaisith (pic) told a news conference that once in effect, there would be a 90-day grace period for adjustments.
The government will collect 0.055% on share sales in the first year and then 0.11%, he said. The ministry expects the tax to generate about 8 billion baht $230.55 million) in the first year and then 16 billion baht per year.
"The tax will not affect the development of new products in the stock market and savings for retirement," he said.
Lavaron Saengsanit, head of the Revenue Department, said the increased tax burden was not significant and was similar to that of other countries.
"The finance ministry is confident that it's the right time as the market is strong, so the tax should be brought back and applied internationally," he said.
Thailand's current stock market capitalisation is 20 trillion baht, higher than the country's gross domestic product, compared with 900 billion baht when the tax was waived, Lavaron said.
However, the tax will be exempted for some investors and market markers such as pension funds, retirement mutual funds and national savings funds, the ministry said. $1 = 34.70 baht) - Xinhua