The Bank of Thailand and Ministry of Finance are discussing ways to tax gold bought and sold through various online channels and settled in baht, according to a Bloomberg report.
1 / 6Just like India, the people of Thailand love gold and the country is a net importer. Yet, people have been selling gold, which has rallied nearly 40% this year, for dollars and converting it into the local currency, Baht.
2 / 6This has led to a sharp rally in the Thai Baht, which hit a four-year high last week. A strong local currency is bad for a country like Thailand where a fifth of the national income is dependent on tourism.
3 / 6The central bank blamed both the rise in gold exports and the weakening of the US dollar, as a result of a trade deal that imposed a 19% tariff of Thai goods exported to the US.
(Photo Credit : Image Courtesy: Bloomberg)
4 / 6So, now the Ministry of Finance is considering an additional tax on gold to keep the Baht attractive for incoming tourists. “Any such levy may exempt gold traded in US dollars, on futures exchanges, or purchases made from bullion shops, the Bloomberg report citing sources said. One kilogram gold bars. Photographer: Brendon Thorne/Bloomberg
5 / 6The government in Bangkok has been concerned by the spike in gold exports, particularly to Cambodia. The two countries have an ongoing border dispute that escalated into a battle before a ceasefire in early August. “It may come from gray businesses like scammers and casinos. It’s possible that they use gold as a tool for money laundering,” Kriengkrai Thiennukul, Chairman of MTS Gold Group, one of the country’s largest bullion traders, reportedly said.
6 / 6Capping the currency appreciation is an added challenge for the newly elected Prime Minister, Anutin Charnvirakul, who took over the reins, on Sep 5, of a country mired in crisis. In August this year, Thai Lawmakers passed a $117 billion budget for the upcoming financial year starting October 1. The central bank has also cut its policy rate for the fourth time in a year, to the lowest level in more than two years, to ease the burden for vulnerable groups.
