COVID-19 Relief Measures Phase 2 & Phase 3Leave a Comment
The Royal Thai Government announced phase 2 of a number of additional financial measures focusing on individuals that are not registered with the social security system. The measures include helping informal workers without social security benefits, including temporary employees and freelancers, and businesses that have been affected by the outbreak of coronavirus.
The following measures will be taken for companies/businesses:
- Soft loans for business; For businesses that have been affected by the partial shutdown, the Cabinet has approved eight measures to support them, including a supportive loan measure with a budget of THB 10 billion. The loan will be offered by the Small and Medium Enterprise Development Bank of Thailand with a limit of THB 3 million per loan with a 3 per cent interest rate in the first two years. The maximum period for the loan is five years, and the deadline to apply for the loan is December 30, 2020.
Businesses that are eligible for the soft loan include tour and travel agencies, spas, transport businesses, hotels, and restaurants, etc.
- Payment of income tax; The deadline for corporate income tax payment is extended from May until the end of August for the annual audit filing, and from August until the end of September for the 6-month report.
- Other measures; Include extensions for all tax payments that are being collected by the Customs Department i.e. VAT for businesses that have to close down because of government orders.
- Excise taxes payment; Excise tax payments for entertainment venues will be extended for three months and all products related to the prevention of the spread of the virus will be exempted from customs taxes.
- Excise taxes payment on oil; The payment of excise taxes on oil will also be extended from 10 to 15 days for 3 months.
6. Import duty; The duty on the import of materials and supplies needed for the research, treatment, and prevention against COVID-19 will also be exempted until the end of September. The list of materials and supplies will be determined by the Ministry of Public Health.
7. Taxes and fees exemption for non-financial creditors; The exemption from taxes and fees to support debt restructuring of non-financial creditors such as credit cards, personal loans, micro-loans for careers, provincial retail loans, hire purchase, leasing and other creditors entering into joint debt restructuring agreements with financial institutions are also being implemented. The exemption period will start from 1 January 2020 to 31 December 2021.
Mortgage registration, transfer, and transaction fees for real estate under the Land Code are also reduced to 0.01 per cent until December 31, 2021.
- Cash handouts; Affected workers and part-time employees who are not registered with the social security system would receive THB 5,000 per month for a period of 3 months. If the situation escalates, the government will expand the period of remedial payment measures.
For workers and employees that are registered with the social security system, they would receive 50 per cent of their wages for 180 days if their employer went out of business or for 90 days if their employer was ordered to temporarily cease operations by the government.
- Emergency loans: An emergency loan program valued THB 40 billion at an interest rate of 0.1 per cent per month and without any guarantee needed to strengthen liquidity for whoever carried an informal debt. The loan limit is THB 10,000 per person, which be given out by state-owned banks and specialized financial institutions
- Soft loans: A special credit aid/a special low-interest loan of THB 20 billion for people who want a loan with THB 50,000 limit, but with an interest rate of 0.35 per month instead.
- Low-interest rate; The Office of the Government Pawnshop has adjusted an interest rate of pawn not over 0.125% per month with a budget of THB 2 billion.
- Tax breaks: Both personal income tax filing and payment is extended until August 2020.
- Health insurance: deductions will be increased from THB 15,000 to THB 25,000
- Risk allowances: for medical professionals involved in the fight against the virus, will be exempted from taxation.
On Friday, 3 April 2020, the Royal Thai Government implemented a curfew from 22.00-04.00 to slow the spread of COVID-19 and also announced phase 3 of the COVID-19 relief measures. These measures will focus on the healthcare sector, affected individuals, SMEs and the stabilization of financial markets are as follows:
- Emergency loans: Emergency loans with a volume of THB 1 trillion will provide support to the healthcare sector and affected individuals as well as the economy in general.
1.1. THB 600 billion support the healthcare sector and individuals who have been affected by the outbreak.
- Cash handouts to the citizens for 6 months
- Support for farmers
- Support for healthcare/public health sectors
1.2 THB 400 billion support for the economy (Economic and social rehabilitation plan)
- Support and strengthen the community’s economic activity
- Investment of infrastructure at a community level
- Soft Loans: Direct soft loans by the Bank of Thailand (BOT) will be provided for businesses, especially SMEs, with a total volume of THB 500 billion:
- The BOT is providing a direct soft loan with an interest rate of 2% for new SME loans with a limit of no more than THB 500 million per loan. The budget for the soft loans is THB 500 billion.
- Commercial banks and SFIs (special financial institutions) are to postpone principal and interest rate payments for 6 months for SMEs that took out a loan of less than THB 100 million
- Measures to stabilize the Financial Markets; Further measures to stabilize the Financial Markets with a volume of THB 400 billion:
- A budget of THB 400 billion to set up a Corporate Bond Liquidity Stabilization Fund or BSF to allow the BOT to buy private bonds with a credit rating no less than an investment grade.
If you have any questions regarding these relief measures, feel free to contact us at [email protected], or call us at +66 (0)2 117 9131-2.