The Royal Thai Government has approved Phase One of a broad range of financial and fiscal relief measures to help Thai companies, especially small and medium-sized enterprises, alleviate the business downturn impact of the COVID-19 virus crisis.
Travel and tourism companies are a primary focus of attention for the relief measures. Finance Minister Uttama Savanayana said that tourism, which accounts for 12% of the GDP, has been one of the worst affected sectors due to a 44% decline in visitors in February 2020. Chinese visitors alone were down 85%.
The downturn has had a significant ripple effect across the Thai economy affecting all forms of transport, trade and other services. Many hotels have temporarily suspended operations. The lack of liquidity also threatens the future of other businesses as well as employment levels.
The package of relief measures was drafted by the Ministry of Finance based on the principles of “Timely, Targeted and Temporary as Necessary”. The measures, approved by the Thai Cabinet on 10 March, 2020, are low interest loans (at 2% interest for a period of 2 years, not over 20 million Baht per customer) in the total amount of 150 billion Baht. The Bank of Thailand has also eased the rules for granting commercial bank loans. The Social Security Fund will provide a credit line (at 3%, for a period of 3 years) in the amount of 30 billion Baht. As well as reducing withholding tax from 3% to 1.5%. Allowing SMEs to deduct 3 times the salary expenses paid in April 2020 to July 2020. For employees who are insured under the law on the Social Security Fund and receive wages of not more than 15,000 Baht per person per month. Dissemination of VAT refunds to domestic entrepreneurs within 15 days after filing the form. Government agencies to reduce rental fees for state property.
Tourism Authority of Thailand Governor Yuthasak Supasorn commented, “TAT has been in constant contact with the private sector, especially the industry associations, ever since the downturn began in late January. We have communicated their concerns and requests to the Ministry of Finance and all other branches of the Royal Thai Government.