REVENUE
WICHIT CHANTANUSORNSIRI
Thailand's tax structure will be overhauled to encourage new investment and upgrade the tax regime to meet international standards, said finance minister Surapong Suebwonglee.
He said the Finance Ministry was conducting a study of tax regimes used in other countries to identify areas where Thailand could improve.
''For example, in many countries, capital gains taxes are waived in mergers and acquisitions, and losses can be claimed against future tax liability,'' Dr Surapong said at a seminar on economic trends yesterday.
The Finance Ministry projects economic growth this year at 6%, up from 4.8% last year. The government's infrastructure megaproject programme, added fiscal stimulus spending and projections of improved domestic consumption and investment are the key drivers for added growth.
Dr Surapong, who recently travelled to Washington to attend the annual spring meetings of the International Monetary Fund and World Bank, said accelerating economic growth would come this year even as other countries in the region are expected to post slower growth due to the more difficult global environment.
Inflation, while relatively high at 5% this year, remained better than several other countries in the region whose prices were rising at 7% to 8%, he added.
''The main problem facing the economy actually is the feeling that politics will remain an obstacle to growth,'' said Dr Surapong, who is also the secretary-general of the ruling People Power Party.
Three coalition parties _ PPP, Chartthai and Matchimathipataya _ are facing possible dissolution due to alleged election fraud during last December's polls. Prime Minister Samak Sundaravej said over the weekend that a court order to dissolve the parties would force him to dissolve Parliament and call new elections.
In any case, Dr Surapong said that the government was considering hiking minimum wages and raising salaries for the civil service to help low-income residents better cope with higher prices.
The ''Thailand Riviera'' programme would also be continued to develop tourism along the coast of Phetchaburi, Pranburi and Hua Hin.
But Korn Chatikavanij, a deputy secretary-general of the opposition Democrat Party, cautioned that the global economy would remain volatile due to the US sub-prime mortgage crisis and soaring oil and agricultural prices.
''The IMF has estimated losses from the sub-prime crisis at $1 trillion, but private banks have taken losses of $300 billion. If ultimate losses are as high as the IMF believes, the potential impact on the world economy will be massive,'' said Mr Korn, a former investment banker.
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