The Thai government is set to amend a tax law to include e-commerce in order to foster fair competition between local businesses and foreign e-commerce operators, as well as collect more foreign tax revenue.
The hearing for this is set to be held in January next year, according to a report by the Bangkok Post.
A previous hearing to discuss taxing overseas e-commerce businesses that sell digital services, such as music downloads and digital marketing, in Thailand, was held earlier this year.
Under the amendment, these businesses will be required to pay a 7 per cent value-added tax (VAT) to the Revenue Department.
The Thai E-commerce Association has been lobbying the government to create fair regulations to prevent a monopoly — particularly, one coming from China — from taking form in the country.
Last month, it was revealed that Chinese internet giant JD.com, through its fintech arm JD Finance, is a key player of a US$500 million e-commerce and fintech project that will set to launch in Thailand. Alibaba-backed Lazada logged 41 million page views in Thailand in December 2016, according to eMarketer. So the Association’s worries are not unfounded.
The Association also wants anti-dumping laws to be introduced. Anti-dumping laws would allow the government to impose tariffs on imported goods that it believes are being priced lower than in their home market.
According to Patricia Mongkhonvanit, deputy director-general of the Revenue Department, there will be no special laws or tax rates for target e-commerce businesses.
“The Revenue Department will emphasise fair competition among traditional and online businesses,” she said, on a panel at Thailand E-commerce Week 2017.
President of the Thai E-Commerce Association, Pawoot Pongvitayapanu, told the Bangkok Post that while foreign e-commerce giants such as Alibaba and JD.com will bolster Thailand’s e-commerce landscape in the short run, local players would not have the resources to compete.
They would have to find their own niches or verticals in order to stand out from their competitors, who dominate the horizontal marketplaces.
Thailand isn’t in the only Southeast Asia-based country taking steps to level the playing field. Last week, the Singapore government also unveiled plans to tax e-commerce, under the Goods and Services (GST) scheme.