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13 August 2002

Regulations Outline Exemption of Tax on Goods Used as Raw Materials or Components in Manufacturing of Goods.

Individuals who are industrial operators or importers, who are considered juristic persons under Thai law, and who have paid-up registered capital within the parameters set forth by the Director-General are eligible for applying for tax exemptions.

Following submission of an application for exemption on goods to be used in the prescribed manner, the applicant must place a security against the tax, notify an Excise Officer prior to taking the goods into his possession, and be given appropriate stamps and documentation from the Excise Office official.

The Act provides specific guidelines for variances in the process of requesting approval, providing and receiving documentation, and taking possession of these materials. Additional information is detailed regarding the delivery of oil and oil products.

Ministerial regulations were enacted in accordance with Section 101 bis of the Excise Tax Act B.E. 2527 (1984), amended by the Excise Tax Act (No.3) B.E. 2543 (2000).

In a related issue, an effort to boost the competitiveness of local industries has resulted in proposed import tariff reductions on raw materials for specific business sectors. Materials used in producing chemicals, plastics, petrochemicals, and textiles would be eligible for the duty reductions. According to a Foreign Ministry official, the rates would be reduced to a flat 1% for raw materials and 5% for semi-finished goods, down from 20-30% where they currently range.


31 July 2002

Shareholding Limits Excised From Broadcasting Business Bill

Shareholding limits outlined in articles 20-23 of the Radio and Television Business Bill have been removed from the legislation. The limits, intended to prevent businessmen from infringing on press freedom, have been deemed by the Council of State as unlikely to provide such safeguards. A spokesman for the council suggested that a self-regulatory body be instituted and that regulations by the National Broadcasting agency that include harsh penalties for violations would be more effective deterrents. Industry officials and free speech activists are at odds over the viability of the methods to prevent individual groups or interests from controlling TV or radio stations.


30 July 2002

New Incentives for Start-up Businesses

The Board of Investment is proposing an incentive package to help foster economic development. The BOI recommends that the government offer courses that teach business strategy to university, vocational, and high school students. They also propose a one-stop information center for businesses to provide training, information, and advice with legal matters. Finally, venture capitalists should be encouraged to invest in new businesses and corporate tax and import duties on machinery should be waived they claim.


29 July 2002

Simplified Tax Rates for Autos Planned

New, simplified tax categories have been created for automotive manufacturers. The new tax code will reduce the number of categories from 10 to 4 in order to make the tax rates for automobiles more straightforward for consumers. The new categories will include passenger cars, pick-up trucks, vans, and three-wheeled tuk-tuks. According to a finance ministry spokesman, local auto manufacturers will have a two year phase-in period to conform to new excise tax regulations. The changes in the tax rates are aimed at simplifying the system and providing manufacturers with incentives to cater to market demands.


16 July 2002

Bank Deposit Insurance Agency Under Development

Depositors may soon have additional safeguards in the event of bank failures if a new deposit insurance agency is organized. According to the Fiscal Policy Office, the new agency will specifically protect deposit accounts when deposits are limited to an as of yet to be determined ceiling of 500,000 to 1 million baht. The new agency's protection of 80-90% of all deposit accounts would replace the current protection provided by the Financial Institutions Development Fund provided by the central bank.


11 July 2002

Justice Ministry Zeros-in On Economic Criminals

The Justice Ministry is planning to develop a new organization to strengthen enforcement of economic laws. According to a justice ministry official, economists and capital market experts will be employed to help capture and prosecute white-collar criminals. Factors leading to the need for new oversight include the limited number of SEC approved auditors relative to the large number of registered businesses, recent mishandling of high profile cases, and the accounting scandals in the United States such as Enron and WorldCom.


10 July 2002

Trade Secrets Act

In an effort to protect businesses trade secrets, defined as "trade information" which is not generally known or accessible to other concerned parties, the Trade Secrets Act became law in July of this year. The law defines trade information as formulas, patterns, compilations, programs, procedures, techniques, or processes made in the manner of statements, stories, facts, or any other methods. Assuming that this information is commercially useful due to its secrecy and that steps have been taken to ensure its confidentiality it will be protected by the new act.

The act stipulates that trade secrets are transferable through written agreements and clearly outlines both the actions that would result in infringement upon the rights of another's trade secrets and those that would not be considered infringement. Actions in violation include disclosure or usage of trade secrets without permission, breach of contract, and espionage. Those that would be exempt from the act include independent discovery and actions necessary for protecting the health or safety of the public.

Enforcement of the act would allow the owner of a trade secret to petition to the courts to stop infringement and request compensation from the party in violation of the act.

Businesses that provide services based on conceptual ideas are expected to benefit from the passage of the act. For example, advertising agencies, who often present their work to prospective clients, previously had no protection for their ideas when showing them to product owners who were not under contract.


8 July 2002

Amendments to Bankruptcy Code Proposed

In an effort to assist businesses struggling with debt, amendments to the Bankruptcy Code have been proposed. The changes are aimed at helping debt-ridden firms avoid foreclosure actions by entering rehabilitation while they are still solvent but unable to pay debt due to limited liquidity. Other changes are aimed at assisting small creditors by categorizing them based on the seniority of their claims. Borrowers would also benefit from ceilings on fees charged by creditor-appointed plan administrators. Ultimately the amendments are expected to give borrowers greater flexibility in order to come out of bankruptcy more quickly.


1 July 2002

US Farm Subsidies Affect Local Growers

The new US Farm Bill, signed by President Bush in May, will increase subsidies to American producers of rice, maize, wheat, cotton, and barley; providing US$180 billion in total over the next 10 years. While these subsidies are within the legal outlines set forth by the WTO they may have adverse affects on small farmers in developing countries. Overproduction caused by subsidies in the US, if mimicked by European countries could exacerbate the problem. Developing countries, like Thailand, that rely on exports of rice and other agricultural products are expected negotiate with the US in the WTO or else adapt to compete in other ways.

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