Thailand’s tax benefit criteria for ThaiESG investments have been revised to further the aim of encouraging savings through capital market investments and incentivizing fundraisers to prioritize sustainability.
Under the proposed changes, investors can benefit from up to 30% of their assessable income with a maximum limit of less than 300,000 baht, a significant upgrade from 100,000 baht and also a shorter 5-year holding period from the purchase date, compared to 8 years in the previous version.
These avenues include SET and mai stocks focusing on environment (E) / ESG or greenhouse gas emission disclosure, ESG Bonds, Green Tokens, and Thai stocks in ESG indexes with international recognition.
Regulators noted that the increase in the tax benefit limit is expected to spur more investments, with studies indicating that each 10-billion-baht investment in Long-Term Equity Funds (LTF) could elevate the SET Index by 25-27 points.
Moreover, the revised criteria provide a savings alternative for new-generation investors, freelancers, and individuals with leftover investment quotas from retirement vehicles like RMFs.
Furthermore, the adjustment in the holding period aims to attract young investors and freelancers who are more open to securities investment risks and seek higher liquidity. This change is anticipated to drive more diverse participation in sustainable investments.
Mr. Koraphat Vorachet, a Strategist at Krungsri Capital Securities, expected the new edition could lead to an annual inflow of 78 billion baht. His quant analysis based on stocks performance, constituent weighing and outstanding short selling, showed that The Siam Cement (SET: SCC), Indorama Ventures (SET: IVL), Central Retail Corporation (SET: CRC), BTS Group Holdings (SET: BTS), PTT Global Chemical (SET: PTTGC), Global Power Synergy (SET: GPSC), CP All (SET: CPALL), B.Grimm Power (SET: BGRIM), SCG Packaging (SET: SCGP) and AP (Thailand) (SET: AP) would be the most beneficiaries from this change.
