The cabinet on Tuesday approved five tax and financial measures to help some 2 million SMEs as part of its stimulus packages to revive the economy.
Deputy Prime Minister Somkid Jatusripitak said the packages should help strengthen existing SMEs and attract new operators with potential.
"They will draw more operators to the tax system so the government can more effectively design aid packages for them in the future," he said.
First, the corporate income tax rate of SMEs with net profit of 300,001 baht or more will be cut to 10% for two accounting years to Dec 31, 2016 from 15% and 20% currently. The tax is already waived for those earning less than that.
Start-ups registering with the Commerce Ministry between Oct 1, 2015 and Dec 31, 2016 will enjoy a 5-year tax holiday. Eligible new businesses must be targeted industries such as food processing, high technology or innovation, digital, as well as research and development.
In terms of funds, the Government Savings Bank (GSB) will extend 7-year soft loans totalling 100 billion baht to commercial banks at 0.1% annual interest rate to be re-lent to SMEs at 4%. The government will subsidise the 2.86-percentage-point difference in interest rates to GSB, or around 20.02 billion baht over seven years.
Financial institutions will also be encouraged to lend more to SMEs by having Thai Credit Guarantee Corporation guarantee their loans. The government will subsidise the fees totalling 14.25 billion baht.
The GSB, Krungthai Bank and SME Bank will each chip in 2 billion baht to set up a joint SME fund to support operators high in potential but low in capital.