Finance Ministry approves TESG Fund to stimulate investment in stocks
Lavaron Sangsnit, Permanent Secretary of the Finance Ministry, announced yesterday (November 14) that a meeting between the Finance Ministry and the Securities and Exchange Commission (SEC) had unanimously approved the establishment of the Thai ESG Fund for sustainability.
The fund, known as TESG, aims for long-term savings and will invest in securities and bonds that align with ESG (environment, social and governance) criteria, supporting Thailand's direction towards green business practices on a global scale.
Investors in the TESG will be eligible for a tax deduction not exceeding 30% of their income or a maximum of 100,000 baht annually. To qualify for the tax deduction, investors must hold the fund units for a full 8 years.
The Finance Ministry anticipates the fund will have an estimated total value of around 10 billion baht within a month of its launch. Trading is expected to commence early in December. The Revenue Department will expedite the legal details for Cabinet approval next Tuesday. The SEC will then set out the criteria for the fund.
The Permanent Secretary also mentioned the possibility of introducing another fund, potentially increasing the tax deduction limit by 100,000 baht, and expanding the available options for long-term investment. This fund is expected to accumulate at least 10 billion baht in its first month,
Referring to businesses in the securities market with ESG criteria, he pointed out that out of 600 companies, 210 are currently ESG-compliant. He believes that with investments in this direction, more companies will transform themselves to meet ESG standards.
He added that the Economic Affairs Division, the Revenue Department, and the Federation of Thai Capital Market Organisation (FETCO) have been collaborating on this matter for some time, with yesterday’s meeting on the schedule for the last month and not an emergency gathering as had been speculated.
The Revenue Department's director-general Kulya Tantitemit estimated a potential annual loss of revenue of around 10 billion baht as a result of the deductions. However, she expressed readiness to support this move towards sustainability and hoped that investors would be interested. She added that the Revenue Department is ready to handle this matter within the current year, allowing for tax deductions from March of next year.
FETCO’s chairman Kobsak Pootrakool, stressed the importance of the global ESG trend and said he hoped that Thai companies would pay greater attention to ESG and make decisions accordingly.
