Cut taxes and rates: chamber
The Thai Chamber of Commerce has called for a cut in taxes and interest rates in order to boost the flagging economy.
The government should cut personal income tax to help middle- and low-income groups spend more money, vice chairman Dusit Nontanakorn told a press conference yesterday. The government cannot rely only on exports because of high competition from Vietnam, India and China, he said. The chamber made its call amid sluggish domestic consumption, with consumer confidence eroded by the uncertain political and economic situations. Consumers are cutting their spending because they cannot earn additional income from overtime, as manufacturers are reducing such work, Dusit said. If the economy continues to slow, employers may have to lay off workers, while newly graduated students would face difficulty in finding employment, he warned. Dusit fears the economy may not recover in the second or third quarters if the government does not implement a stimulus package soon. It is good news that the government plans to boost the real-estate sector, but it has to move faster, he added. He also suggested that the Bank of Thailand cut its policy rate by up to a full percentage point. If the central bank cuts the rate by only half a percentage point, it would not be sufficient to stimulate the economy, he said. If the government moves slowly, it may miss an opportunity to revive the economy this year and growth could fall below 4 per cent, Dusit said. The chamber called on the government to accelerate implementation of a rescue package for businesses in the restive South suffering from daily violence. Aat Pisanwanich, economist at the University of the Thai Chamber of Commerce, also urged the government to boost domestic consumption. In the past 10 years, consumption has accounted for 53 per cent of gross domestic product, but it now lags behind Vietnam, where consumption is 70 per cent of GDP, he said. Aat, also director of the university's Centre for International Trade Studies, is optimistic that the economy will recover in the third quarter due to increased public spending and lower interest rates. He predicted growth this year would be about 4.3 per cent, down from 5 per cent last year. Finance Minister Chalongphob Sussangkarn is considering introducing tax incentives to boost the property sector and domestic consumption. Proposals include reducing the mortgage fee from one per cent to 0.01 per cent. The ministry might also give more tax reductions and allowances for taxpayers, aimed at boosting their income. Wichit Chaitrong The Nation
|
