"It is the policy of the former finance minister [Somkid Jatusripitak] that we will not extend the tax incentives. However, if it is proposed, I will discuss it with Somkid. I'm not a stubborn person but I have to consult with economic agencies first," Thanong said. "I admit that listed companies shoulder the high costs associated with information disclosure and dissemination to ensure transparency, but we offer them some tax privileges to encourage investment."

Prasert Bunsumpun, chairman of the Listed Companies Association, said on Tuesday that the association would ask for tax breaks to encourage more listings  to help attract investors.

The Thaksin administration in its first term approved temporary cuts in the 30-per-cent corporate income tax rate to 25 per cent for companies listed on the Stock Exchange of Thailand and 20 per cent for companies on the Market for Alternative Investment.

Those perks have already expired.

Thanong said he had assigned the Fiscal Policy Office to forecast government revenue collections over three fiscal years starting from fiscal 2007, which starts on October 1.

Siroj Sawasdipanich, director-general of the Revenue Department, said listed companies should rely on efficiency rather than tax incentives to sharpen competitiveness.

Despite substantial foreign net selling on the bourse in recent months, no capital has fled the country, Thanong said. Most of the funds have been shifted into the local money market, helping to boost liquidity at commercial banks.

"This situation will likely continue for a while," he said.

The SET Index closed up 0.46 per cent to close at 649.74 with turnover of Bt5.46 billion, the lowest trading volume in three years.

Thanong will lead a road show to Singapore on July 13 and 14 to promote foreign investment in Thailand, his ministry said in a statement.

He will lead executives from state enterprises - including PTT, Thai Airways International and Krung Thai Bank - along with major listed companies.

He is scheduled to give a dinner speech on July 13, and will brief institutional and large investors about Thailand's policies. He will exchange views with them on investing in the Kingdom over breakfast on July 14, the statement said.

The road show, which will be held at the Ritz Carlton Hotel, is organised by the ministry, the SET, Merrill Lynch and Phatra Securities.

Thanong also said he was satisfied with the strength of the baht.

"The baht is quite stable and I am happy with the Bt38 level, give or take some," he told reporters.

He said the wide May trade deficit was chiefly due to the swollen value of oil imports due to  higher prices. However, export growth remains strong and the positive momentum is expected to continue.

The Commerce Ministry reported on Tuesday that based on raw Customs Department data, the trade deficit ballooned to US$646.4 million (Bt24.9 billion) in May, from $551 million in April. According to the ministry, exports were up 18.8 per cent on year to $10.8 billion in May. Imports rose 6.4 per cent to $11.5 billion.

Wichit Chaitrong

 The Nation,

 Dow Jones Newswires