Thailand needs to adjust tax rates before it can join OECD: Pichai

Thailand has a lot more to accomplish including enforcing the so-called Global Minimum Tax (GMT) measure before it can join the Organisation for Economic Cooperation and Development (OECD), Finance Minister Pichai Chunhavajira said on Wednesday.

Pichai was speaking to reporters after meeting with OECD secretary-general Mathias Cormann at Government House.

The minister said he had learned that Thailand had several more tasks to accomplish in five years before it could be accepted as a formal member of the OECD.

He said the kingdom would have to revive its laws and standards of practice to meet the standards of the OECD member nations.

The country will, in particular, have to adjust its tax measures to be in line with the OECD’s policies. The finance minister, who also doubles as deputy PM, said the Board of Investment is scheduled to deliberate on Friday on the implementation of the GMT as required by the OECD.

The GMT is an internationally agreed-upon minimum rate of tax that has to be paid by large corporations.

The new GMT sets the proposed rate at 15% on profits. The OECD proposal has received the support of 137 countries and was approved at the October 2021 Summit in Rome to go into effect in 2024.

Pichai said the BOI may consider other tax privileges to replace corporate tax exemption for large corporations. For instance, it may implement tax reductions for companies that invest in human resource development or firms that use green technologies.

During the discussion, Pichai said the OECD secretary-general also advised Thailand to follow examples set by certain developed countries on how to efficiently achieve economic recovery.