Mr. Kittipong Urapipatanapong, Chairman of Baker & McKenzie Ltd., revealed during the Legal in Action session titled "Proposal: Supporting Citizens and Restructuring Thai Taxation Post-COVID-19" that businesses should prepare for legal matters, especially regarding taxes, after COVID-19. He advised entrepreneurs to closely examine the legal benefits provided by the government, including labor laws concerning social security, extensions for tax filing, withholding tax deductions, and measures from the Bank of Thailand (BOT) for debtors.

The government has already implemented some tax measures, such as extending the tax payment deadline to August 2020, reducing interest burdens for SMEs participating in the government’s low-interest loan program (soft loans), allowing a 1.5 times deduction for interest expenses paid from April to December 2020, and supporting SMEs to maintain employment by allowing a threefold deduction for wage expenses from April to July 2020, along with debt restructuring benefits, among others.

However, an important step that the government has yet to take is how to register individuals to bring them into the system to ensure proper assistance in the future and reduce tax evasion issues. This includes registering and organizing cashless payment systems or assistance registration, consolidating citizen data from various ministries into a unified system (Big Data), and facilitating money transfers to PromptPay accounts or Smart cards that can be used across all businesses under the tax system.

Additionally, the government should provide more support to income taxpayers, especially for employees, entrepreneurs, and legal entities that have paid taxes to the government over the years. This could involve reducing income tax rates for those required to file taxes for the year 2019, transferring funds to individuals whose income does not meet the tax threshold through cashless payment registration, and considering tax credits for profitable legal entities, among other measures, to foster a sense of care from the government in return for tax contributions.

Furthermore, the government should assist with Soft Loans and tax benefits for Supply Chains, both for the public sector and large companies. This includes providing interest-free loans to SMEs, offering tax benefits to large companies with good performance that waive their rights to participate in government programs while supporting their partners. The government should also consider subsidizing salaries for some employees or providing partial salary support to companies affected by COVID-19 that still have the potential to operate without laying off employees, in addition to social security benefits. This assistance could be capped based on the employees' maximum salaries and include extending debt repayment periods and waiving interest from financial institutions, such as suspending debt payments for both individuals and legal entities and waiving interest for 3-6 months to help these individuals have more cash flow.

Mr. Kittipong stated that for other preparations businesses affected by COVID-19 should consider, it is crucial to study out-of-court debt restructuring options, such as negotiating with creditors for extended repayment terms, reducing principal/interest, selling non-core assets, converting debt to equity, seeking joint venture partners, mergers and acquisitions, buying back debt at a discount, and transferring good assets to settle debts. Additionally, businesses should prepare to study debt restructuring through the bankruptcy law's rehabilitation process.

SOURCE: www.ryt9.com