The Covid-19 outbreak around the world has hit the global economy very seriously. Governments worldwide are trying to combat the recession they are facing in every manner possible. On 4th March 2020, the government of Thailand decided to issue its Phase-I incentive in order to combat the outbreak. The package has been valued at 100 billion Baht or $3.2 billion USD, and it will provide essential assistance to households and businesses in the country. The Thai Central Bank declared that the economy of Thailand during this outbreak can shrink by almost 5.4% and it is the worst the country has ever faced. Even the 1997 financial crisis did not cause so much damage to the Asian economy.
The relief measure is going to be handed out to the needy in the form of cash handouts and low-interest financial loans for a certain time period. The Covid-19 outbreak in Thailand has affected 2000+ individuals in the country with more than 50+ deaths. On top, the tourism and export sectors have taken a very heavy toll already.
Grants By The Thai Government – Phase 1
Here are the grants allocated by the government of Thailand for Phase I of the crisis.
The Thai government allocated 30 billion Baht or USD $918 million in the form of low-interest loans for Thai citizens. The government also decided to make a reduction in the Social Security Fund (SSF) from 5% to a straight 4% for the time being. Citizens who have successfully registered themselves under the SSF, are also eligible to get unemployment compensation that can go up to 50% of their salaries. Another 17 billion Baht or USD $520 million is allocated for the reduction of water and electricity bills by almost 3.2%. Many hotels and other essential properties will get an extension for paying their electricity payments for now.
Support For Businesses
The Thai government has also allocated serious funds for the support of many business sectors for the time being. GSB or Government Savings Bank announced that they are going to provide low-interest loans, worth 150 billion Baht, or USD $4.5 billion. It will also lend loans to many commercial banks with a very lowered rate of interest at almost 0.01%. This will, in turn, allow the commercial banks to grant vital loans to the businesses with a minimal rate of interest at only 2% – 2.5%.
Eligible businesses can receive this interest rate only for the first two years on the 20 million Baht or USD $612,000. The Social Security Office (SSO) of Thailand has granted soft loans to the SSO-registered entrepreneurs worth around 30 billion Baht or USD $918 million. Here are some more grants that are allocated –
- Withholding Tax Deductions – the rate of withholding tax deductions is reduced to 1.5% from 3%, issued from 1st April 2020 until the 30th of September, 2020. Again, it will be reduced to 2% from 1st October 2020 until 31st December 2020.
- VAT Refunds – all businesses that have participated in the ‘Good Exporter’ event will receive VAT refunds in just 15 days. Earlier it was set to a period of 30 days. A Good Exporter is a business that is VAT registered and can be a public or limited company, that adheres to export regulations and promise a ratio of goods exported to not less than 50% of sales.
Startup in Thailand has launched a special low cost, flexible scheme called Build Entrepreneurs for individual entrepreneurs to combat COVID situations in Thailand and launch their business in a cost-effective way. The idea is to provide a comprehensive support system to budding entrepreneurs and handhold them to be successful through various packages offered in this incubation process.
Grants By Thai Government – Phase II
Here are the grants allocated by the government of Thailand for Phase II of the crisis.
In spite of the extensive efforts of the SSO and Central Government to help households and individuals during this crisis, more than 3 million workers are not registered under the Social Security Fund (SSF). The government has decided to hand out 10,000 Baht emergency loan to any person in need at an interest rate of less than 0.1% monthly. They will be barred from providing any collateral. Special loans of 50,000 Baht will be provided at 0.35%. State-owned pawnshops have been ordered to charge an interest rate of 0.125% per month. The government has extended the date for filing the income tax reports to August 2020. All medical workers and associates will not be required to pay any income tax for the 2020 session.
Support for Businesses
In order to support the businesses in Thailand, the government has declared that businesses can issue loans of up to 3 million Baht for SME at less than 3% interest for the initial two years. The deadline for submitting Corporate Income Tax has been extended to August and September. All businesses will receive a whole month of extension for filling their excise duty. Excise duty for oil product operators is extended for the next three months.
Thai Government declared exemption of import duty on the products that are related to the treatment and prevention of the Covid-19 virus. To reduce the burden on borrowers during this economic crisis, the Monetary Policy Committee (MPC) announced on 20th March 2020 that the policy rate will be cut short from 1% to 0.75%, effective from 23rd March 2020. This will ensure lesser strain on liquidity during this time.
The Covid-19 outbreak around the world has to lead to severe depression in the global economy and has affected almost every country that exists in the globe. Serious efforts are being taken by the Thai government in order to combat the side effects of the pandemic. Almost after a couple of months, the outbreak was first announced, the situation has improved a lot at the time of writing this article and Thai Government has just announced to open certain businesses in a phased manner. People are urged to not panic and follow all government instructions carefully.
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