Marking the start of a brave new decade, 2020 will be jam-packed with world historical events, not just in Thailand, but throughout the world.
From Tokyo's Olympics to what could be the biggest trade deal in history, the Regional Comprehensive Economic Partnership (RCEP), the new year will have no shortage of surprises, upsets and monumental human achievement.
While the economic forecasts appear dour, 2020 will be a year of celebration and optimism as the globe approaches a new decade with endless possibilities.
TOKYO OLYMPICS
The 32nd Summer Olympics in Tokyo will be held from July 24 to Aug 9 and could cost the host nation as much as US$26 billion.
This will be Tokyo's first Olympics since 1964 and will include new sports such as 3x3 basketball, freestyle BMX and madison cycling. Japan has also previously hosted two Winter Olympic Games, Sapporo in 1972 and Nagano in 1998.
In response to sustainability concerns, the Tokyo Games will utilise a number of venues from the 1964 games. The Tokyo National Stadium, the location for the opening and closing ceremonies, as well as a variety of athletic competitions, will be completely revamped and replaced by a new arena. The Nippon Budokkan for judo, the Baji Koen Park for equestrian events and the Yoyogi National Gymnasium for handball will be also be reused.
But the games are already beset with controversies, as the World Anti-doping Agency issued a four-year ban on Russia for failing to comply with global drug testing rules. The decision follows a previous ban on Russia from the 2018 Winter Olympics in Pyeongchang, South Korea.
EUROPEAN FOOTBALL
Another quadrennial sporting event held this year is the Uefa European Football Championship. The 16th European football tournament will comprise 24 national teams and 51 matches held in 12 cities. But football fans will have to wait another two years for the next World Cup in Qatar.
The Uefa championship, also called Euro 2020, will be held in stadiums in Glasgow, London, Dublin, Bilbao, Amsterdam, Copenhagen, Munich, Rome, Budapest, St Petersburg, Bucharest and Baku. And unlike the Olympics, the Russians are able to compete.
The tournament, which is usually held in one nation, is being hosted in several nations across Europe as a one-off event to celebrate the 60th "birthday" of the European Championship competition.
Tickets may be hard to come by, as 19.3 million requests were submitted last summer for the 1.5 million available tickets for the whole tournament. To accommodate disappointed fans unable to secure tickets, Uefa is planning to open "fan parks" with large screens to watch the games, community events and pop-up concerts in host cities.
The favourite to win, according to some bookies, is 2018 World Cup champion France.
US ELECTION
On Nov 3, 2020, citizens of the US will head to the polls for the conclusion of another gruelling multi-year-long presidential campaign. President Donald Trump will face off against a yet-to-be-decided opponent from the Democratic Party. Voters will decide whether a strong economy and well-performing stock markets offset Mr Trump's erratic temperament and fractious relationship with global leaders.
The Democratic contenders, currently competing in state-by-state primary elections to decide the nominees, are firmly divided into two camps: progressives and moderates.
Senators Bernie Sanders and Elizabeth Warren represent the progressive wing of the party, receiving wide-ranging support from activists and young people. While they both promote similar policies, such as socialised medicine and student loan forgiveness, Ms Warren represents a more sanitised alternative to Mr Sanders, and is more palatable to the elite establishment.
Pete Buttigieg, the millennial former mayor of a small city in Indiana, and former vice-president Joe Biden promise a return to a pre-Trump-era business-as-usual. Standing firmly against universal, government medical care (the driving issue in the primary campaign) and fuelled by business interests and billionaire cash, the two draw the ire of young progressives while appealing to an older generation looking for the best odds of beating Mr Trump. Mr Buttigieg paints himself as a younger, smarter alternative to Mr Biden, who despite leading in the polls is losing confidence among voters due to his slurring, often incoherent speeches and imprecise policy objectives.
BREXIT
After a massive election victory for the British Conservative Party under the slogan "Get Brexit Done", 2020 may be the year Brexit finally happens.
It was all the way back in 2016 when the British electorate voted to leave the EU, and since then negotiations between the UK and the bloc have been hobbled by delays and broken deadlines, as neither party could seem to come to an agreement.
Prime Minister Boris Johnson received a huge popular mandate in this year's election, winning 47 new seats for the Conservative Party, while the main opposition Labour Party lost 59 seats. Under the leadership of Jeremy Corbyn, Labour pushed forward a muddled Brexit policy, promising to negotiate a new deal with the EU before bringing it to another popular referendum, a notion that proved unpopular with British voters.
The Brexit deal could break up more than the UK's ties with the EU: the latest election saw huge gains for the Scottish Nationalist Party, 13 seats, with its promise of Scotland's independence. While the last popular vote for independence failed in Scotland, the economic and social repercussions of Brexit could spur many Scottish voters to leave the UK for closer ties to the EU.
In Northern Ireland, the pro-UK Democratic Unionist Party lost major ground to parties in favour of leaving the UK for a unified Ireland, and for the first time ever Irish nationalists and republicans hold a majority in Northern Ireland.
While Brexit may cause ripples throughout the world economy, its most significant effects could potentially be the dissolution of a nation once considered the world's most prolific and powerful.
LAND AND BUILDING TAX
Starting from Jan 1, land and building taxes replaced the house and land tax and the local development tax.
The new property tax, which the government hopes will reduce income disparity and alleviate the fiscal burden in subsidising local administrative organisations, applies to residences, farmland, commercial areas and undeveloped land.
According to the new tax structure, land and buildings used for residences with appraisal prices of up to 50 million baht are tax-exempt for principal homes, while those valued at more than 50-75 million baht are taxed at 0.03% of appraisal prices, more than 75-100 million baht at 0.05% and more than 100 million baht at 0.1%.
Those who only own houses, but not land, qualify for a tax exemption for the first 10 million baht of their houses' appraisal prices. Residences with appraised value of more than 10-50 million baht are charged 0.02%, more than 50-75 million at 0.03%, more than 75-100 million at 0.05%, and more than 100 million at 0.1%.
If owners have more than one home, the second and subsequent residences are subject to 0.02% tax for those with an appraisal price of up to 50 million baht and the same tax rate as principal homes are applied for those with appraisal prices above 50 million baht.
Principal homes are defined as residences where the owners' names are listed on the household registration.
Land for agricultural purpose with appraisal prices of up to 75 million baht are levied at a rate of 0.01%, more than 75-100 million baht are taxed at 0.03%, more than 100-500 million baht at 0.05%, more than 500 million to 1 billion baht at 0.07% and more than 1 billion baht at 0.1%.
But buy-to-let residence owners and land rented for farming reap a windfall from state agencies' recent decision to apply land and building tax rate for residential and agricultural uses, respectively, not commercial purposes.
Commercial land is charged 0.3% for property with appraisal price up to 50 million baht, 0.4% on land worth more than 50-200 million baht, 0.5% for land valued more than 200 million baht and 1 billion baht, 0.6% on land worth more than 1-5 billion baht and 0.7% on land worth more than 5 billion baht.
For vacant land, tax rate of 0.3% is applied and will increase by 0.3% every three years up to a cap of 3%.
The first land and building tax payment has been delayed to August 2020 from April, and landlords and homeowners must pay the tax bills in every April starting from 2021.
But farmland is tax-exempt for the first three years to comply with a measure to alleviate tax burden for low-income rural landowners, while owners of land for other uses who are subject to higher property tax bills are allowed to gradually phase in the increase each year, rising 25% each year over the course of four years.
For example, a landlord liable for an additional tax payment of 1,000 baht after the land and buildings tax is enforced is subject to a 250-baht incremental tax for the first year, 500 baht the second year, 750 baht the third and 1,000 baht from the fourth year.
RCEP
With the ongoing trade spat between China and the US and increasing non-tariff barriers and uncertainty of the world economy, the RCEP appears a great hope for the bloc to increase trade and investment.
The RCEP is a proposed free-trade agreement between the 10 member states of Asean and six dialogue partners: China, Japan, South Korea, India, Australia and New Zealand.
RCEP talks were launched in November 2012, with the goal of deepening economic cooperation between Asean and the six trade partners.
Signatory countries to the RCEP have a combined population of about 3.56 billion, with a trading volume of more than $10.3 trillion (328 trillion baht) or 29% of world trade.
If the RCEP is finalised, the 16 countries will form a major trading bloc accounting for about one-third of the world's GDP.
Backed by China, the RCEP is often seen as a rival to the Trans-Pacific Partnership (TPP), a pact once led by the US before President Trump withdrew from it early in his term.
Thailand, as the chair of Asean, announced in September the bloc and all RCEP dialogue partners had agreed to conclude the negotiation at Asean summit meeting in November.
But at the last minute of talks last Nov 4, India abruptly deciding to pull out from joining the RCEP because of significant outstanding issues. The pact is expected to be signed this year during the Asean Summit in Vietnam.
India is concerned about the potential impact on the livelihoods of its most vulnerable citizens and its widened trade deficits and an anticipated flood of imports, especially cheap products from China.
India had a huge trade deficit of $52 billion with China in 2018, according to the Economic Times. The country has also been logging trade deficits with other RCEP countries, including Australia, Indonesia, South Korea, New Zealand and Thailand.
Domestic political parties and business groups, particularly for dairy, cheese, yoghurt, automobiles and garments, opposed joining RCEP.
The leader of the RCEP's statement noted that the 15 participating countries have concluded text-based negotiations for all 20 chapters and market access issues, with legal scrubbing to commence for signing the trade pact in 2020.
Following legal vetting, the participants will prepare to sign the RCEP in November 2020 during the Asean Summit in Vietnam.
Thailand and other dialogue partners as well stay committed to convince India to be back on the negotiations whenever India is ready.
With or without India, Thailand still stands to benefit from greater market access the pact allows, said Piti Srisangnam, the director of academic affairs of the Asean Studies Centre at Chulalongkorn University.
As a result of the trade war and dealing with changing of world supply chains, Thailand will benefit from relocation investments, he said.
Visit Limlurcha, vice-president of the Thai National Shippers' Council, warned India's absence from the RCEP may cause Southeast Asia to be too influenced by China as there would be no big countries to balance its power.
TFRS
Adoption and compliance with the new International Financial Reporting Standards (IFRS) to local accounting standards not only present a daunting task for businesses, but also analysts and investors using financial data and different variables for investment decision-making.
Two new accounting standards take effect on Jan 1, while another came into force in 2018.
First and foremost, the Thai Financial Reporting Standards (TFRS) 15, which has been in force since 2018, is related to revenue from entering into financial contracts with customers. Second, TFRS 16 is related to leasehold rights and recording of rental expenses.
Last but not least, TFRS 9 is associated with classification and measurement of financial instruments, impairment recognition and hedge accounting.
The impact will inevitably be felt in every company across the business spectrum, from those positioned in the top line to bottom line businesses.
"It will be a challenging year for users of financial reports because the looks of financial statements of many business will change drastically," said Tanapat Chatsatien, vice-president for R&D at Trinity Securities. "TFRS 9 does not require two years of historical comparison of financial statements. Therefore, the looks of financial statements might be completely changed from what you have seen before."
Mr Tanapat said TFRS 15 has an impact on revenue, especially for companies whose mainstream revenue is derived from long-term contracts. Under the new accounting standard, revenue must be distributed as revenue recognition according to contract periods, a deviation from the previous recognition where revenue was recognised at one time.
Leasehold rights and recording of rental expenses will effectively change as TFRS 16 has freshly been introduced.
At present, leasing is classified into two types -- operation lease and financial lease. However, lease contracts longer than one year are required to record asset (leasehold rights) to match with liability (lease liability). Rental revenue longer than one year must also be discounted for the present value for accounting purposes.
Businesses having a huge amount of lease transactions such as airlines and telecommunications will experience a major impact. For example, the debt-to-equity ratio and return on assets will be changed on the back of increased assets and liabilities.
Therdsak Thaveethiratham, executive vice-president of Asia Plus Securities, said companies that sold their properties to property funds or real estate investment trusts and rent these assets back into business operations will also be impacted by TFRS 16.
TFRS 9 is poised to have a huge impact on banks and financial institutions that operate lending businesses. But the impact spectrum is not restricted there as other businesses related to investment and financial instruments, such as insurance, securities companies and mutual funds are also affected.
Thawatchai Kiatkwankul, assistant secretary-general of the Securities and Exchange Commission, said companies related to public interest, including publicly listed companies and non-listed firms that place equities or bond instruments for the public, are also required to comply with TFRS 9.
IFRS 9 introduces changes across three areas with profound implications for financial institutions. These are the classification and measurement of financial assets; the introduction of a new expected loss impairment framework; and the overhaul of hedge accounting models to better align with risk management activities.
Although many expect banks and finance businesses will be the most affected, most commercial banks and SET-listed companies clustered in the financial segment have been preparing for TFRS 9 adoption including upgrading operating systems and gradually setting aside higher loan-loss reserves, said Mr Thawatchai.
Therefore, the impact from TFRS 9 on financial statements in the first quarter of adoption is not expected to be severe. On the contrary, this could improve companies's financial status and operations.
Since financial variables will be changed substantially, investors should do an in-depth analysis of companies they are investing in.
"Investors should read financial statements in detail, both annual reports and the first quarter of 2020, especially financial statement notes as each company should describe the impact on their financial reporting from the three new accounting standards," said Mr Tanapat of Trinity Securities.
In 2020, 5G adoption will depend on the result of the 2600MHz licence auction.
5G
The government is pinning hopes on the 5G licence auction scheduled for February, expecting the ultra-fast broadband connection to be a boon for the economy in 2020.
The early adoption of 5G is also hoped to ensure the country's competitiveness and add value to the government's projects, such as the Digital Park and Thailand Digital Valley, located in the Eastern Economic Corridor.
However, major mobile operators and telecom veterans strongly believe the real business use cases through 5G tech adoption in the country will be seen in 2021 at the earliest.
In 2020, 5G will mean only an enhanced mobile broadband service with ultra-fast data traffic and potentially serve as a marketing point to draw customers.
The telecom regulator initially planned to auction off four spectrum ranges on Feb 16, consisting of 700MHz, 1800MHz, 2600MHz and 26GHz ranges.
In early December, the telecom committee of the National Broadcasting and Telecommunications Commission proposed the removal of the 700MHz range from the batch subject to the auctions due to some technical difficulties.
The range is being used by broadcasting network providers, which will be migrated to the 510-690MHz range.
The move is in line with the standard of the International Telecommunication Union, which indicates that the 700MHz range should be used for telecom services. Additionally, some slots of the 700MHz range currently cater to microphone usage and the range is planned to be vacated by March 2022.
The three major mobile operators have made it clear that the 2600MHz is the most compatible for 5G adoption in comparison with the remaining three ranges.
TOT and CAT Telecom have been supported by the Digital Economy and Society Ministry to participate in the 5G licence auctions, as the two state telecom enterprises are expected to help provide social services through the technology. Criticism, however, has flared about the two enterprises' incompetence in network investment and management.
In 2020, 5G adoption will depend on the result of the 2600MHz licence auction.
Of 190MHz of bandwidth on the spectrum available in the auction, each operator is said to need at least 100MHz of bandwidth to ensure effective 5G service.
If only two major operators grab the licences on the range, the loser may trigger a price war of 4G services. This may prompt the two big operators to jump into the price war, jeopardising other small operators.
If the three major operators manage to grab some portions of the 2600MHz range, this would be a boon for the market.
The operators are also keeping an eye on the possible 3500MHz auction in the future as the range is the most common standard for 5G adoption globally.
In 2020, it is unlikely that use case development for 5G tech will be in full swing as vertical industries need some time to come on board. The 5G drive in 2020 will mainly concern enhanced mobile broadband with adoption of some tech involving virtual reality and augmented reality.
Violators of the Personal Data Protection Act could be jailed between six months and a year.
PDPA
The Personal Data Protection Act (PDPA) will come into force on May 28, a year after it was published in the Royal Gazette with a grace period given for all stakeholders to adjust.
The law is expected to have the most profound impact on business operators and those that collect personal data of customers, in comparison with other pieces of digital-economy-related legislation.
Violators could be jailed between six months and one year and fined between 500,000 baht and 1 million baht.
The PDPA was modelled after the EU's General Data Protection Regulation.
Paiboon Amonpinyokeat, a member of the PDPA preparation committee, said the definition of personal data, based on the law, is any data that can identify that person directly or directly, such as a photo, ID number, address, internet behaviour, IP address as well as media access control address for a computer user.
The legislation, he said, would affect four main groups: human resources (employee data), marketing and public relations (customer data), IT departments (databases) as well as legal affairs (information in contract).
Mr Paiboon suggested that key sectors, such as banking, insurance, healthcare and telecom, outline a code of conduct in relation to data security and privacy and submit it to the DES Ministry as a guideline they will follow through on.
Businesses, he said, should have data protection officers that ensure the legal compliance among the four groups. The DES Ministry needs to educate people to avoid making unnecessary complaints or lawsuits.
Wichaya Chao, managing director of consulting firm Accenture Thailand, said businesses should not regard the law as a burden, but rather treat their data as an asset and become a data-driven company that can gain better customer insights and usher in new business approaches in response to them.
The law will become a new guideline for information sharing across sectors. It would encourage companies to reorganise their data storage, which could help lower their costs.
The PDPA allows data owners to have their data erased and ask service providers to do so. Businesses are obliged to terminate all data whose owners told them they do not want to retain it.
He said businesses need to make data anonymous before processing it. They should make sure the data they keep cannot be traced to identify actual owners.
Keeping data anonymous could help ward off legal problems in the case that personal data is drawn into big data analysis.
Mr Wichaya said businesses need to carry out their own risk assessment in relation to the law.
"Data-handling staff must be also educated on how to deal with the issue," he said.
