Whether the Finance Ministry will extend corporate tax privileges to newly listed companies is one top item on the agenda to be discussed in a meeting between the Stock Exchange of Thailand (SET) and Finance Minister MR Pridiyathorn Devakula early next month.

Representatives from the Federation of Thai Capital Market Organisations will also participate in the meeting, SET president Patareeya Benjapholchai told reporters yesterday.

Companies are subject to a 25-per-cent corporate tax payment if their stocks are listed on the SET this year and 20 per cent if their shares are listed on the Market for Alternative Investment. The tax privilege will last for five accounting years as part of the SET's effort to attract newly listed companies. The regular corporate tax is 30 per cent.

"Tax incentives are an effective measure for attracting newly listed companies, and about 500 existing listed companies pay one-fourth of their total revenues in corporate income tax, so we think the government should create some benefit to newly listed firms," said Patareeya.

"However, the Revenue Department might need measures in return from listed

companies, including corporate governance or free float."

So far this year, 11 companies have debuted on the stock market, far below the SET's target of 80 firms.

In addition, the SET will ask to extend tax privileges in the event of mergers and acquisitions and to waive capital gains tax for the Bond Electronic Exchange.

Regarding boosting demand in the stock market, Patareeya said the SET would provide greater coordination with commercial banks.

For instance, the SET might allow brokerage houses to make distribution channels through commercial banks, with the aim of raising the country's savings.

Siriporn Chanjindamanee

The Nation