In an effort to rejuvenate the Thai stock market, which recently plunged to a five-year low, policymakers are considering the introduction of a Thailand Individual Savings Account (TISA)—a tax-free investment scheme modeled after Japan’s successful Nippon Individual Savings Account (NISA). This initiative aims to encourage retail investors to shift from traditional bank savings to stock investments, injecting much-needed liquidity into the market.
Japan’s NISA Success Story
Thailand’s move follows Japan’s experience with NISA, which was first introduced in 2014 to stimulate retail investment in equities and mutual funds. Initially offering a five-year tax-free period, NISA underwent a major reform in 2024, making it a permanent tax-free scheme with a lifetime investment cap of ¥18 million. This reform significantly increased investor participation, leading to a surge in Japanese stock prices.
Since the implementation of the expanded NISA program in 2024, Japan’s stock market has experienced a remarkable rally. The Nikkei 225 index soared to multi-decade highs, driven in part by strong inflows from retail investors. The expanded tax benefits and investment limits encouraged long-term investing, stabilizing the market and reducing volatility.
How TISA Could Revive the Thai Stock Market
Thai authorities are looking to replicate Japan’s success by introducing TISA, which would offer similar tax-free incentives for investments in Thai stocks, ETFs, and mutual funds. This initiative is seen as a potential game-changer for the Thai stock market, which has been struggling due to capital outflows, weak investor confidence, and concerns over economic growth.
By encouraging Thai retail investors to move their savings into equities, TISA could help drive demand for Thai-listed companies, strengthen market resilience, and provide a new source of capital for businesses. Analysts believe that a well-structured TISA program could stabilize the SET Index, attract younger investors, and support long-term wealth accumulation.
Challenges and Considerations
While the introduction of TISA presents a promising opportunity, its success will depend on key factors, including attractive tax incentives, investor education, and government support. Additionally, policymakers must ensure that the program aligns with Thailand’s broader financial goals while preventing excessive speculation.
If Thailand successfully implements TISA with strong regulatory backing, it could mark a turning point for the Thai stock market, much like how NISA helped propel Japan’s equity markets to new heights. Investors and market participants are now eagerly awaiting further details on this initiative, which could play a crucial role in restoring confidence and revitalizing Thailand’s financial markets.
