PwC Thailand has called for business and government leaders to adjust the Thai taxation structure and outdated laws to stay competitive before the implementation of the Asean Economic Community in 2015, as fast-emerging Asian markets play a greater role in driving the world’s economy.
State agencies, government regulators and businesses must prepare themselves in several aspects for the AEC, particularly by amending laws and regulations on tax-related issues that hinder the country’s competitiveness on trade and investment, said Sira Intarakumthornchai, chief executive officer of PwC Thailand.
He made the remarks during PricewaterhouseCoopers’ 14th annual conference, titled “Maximise Shareholder Value through Effective Tax Planning 2013″. The theme was “Thailand and the Emergence of Asia”.
“Thai businesses could confront a number of tax-related obstacles when exploring cross-border opportunities in trade and investment if we were to enter the upcoming economic integration unprepared,” Sira said. “We [Thailand] must step up and prepare ourselves for the forthcoming changes by studying thoroughly the possible impacts of the AEC on Thai businesses to see how best we can thrive in the new market environment.”
The disparate policies in each country must be aligned and standardised. Additionally, taxation structures in some areas, such as capital gains tax and corporate income tax, would have to be reformed to support Thai companies looking to make overseas investments, and in return to attract more foreign businesses into the country, he said.
Thavorn Rujivanarom, tax lead partner of PricewaterhouseCoopers Legal & Tax Consultants, said greater economic integration under the AEC would not only bring opportunities for Thai enterprises to benefit from a much bigger market with an approximate population of 600 million, but also the threat of greater competition from neighbouring countries.
“The Revenue Department has prepared certain measures to support the forthcoming economic integration: a tax-collection approach that will facilitate international trade and investment between countries, ease the flow of funds and enhance labour mobility within the region. However, it also needs to reform the tax structure properly to improve Thailand’s competitiveness,” Thavorn said.
“At the same time, it has to be able to accommodate foreign taxpayers and international businesses by strengthening its cooperation with the tax authorities in each member country. The government must also create some incentives to…