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Govt plans grants, losses from riots estimated at $6.51 billion
Tue, May 25, 2010
The Nation/Asia News Network

BANGKOK - A number of remedial measures have been drawn up for Cabinet consideration today, ranging from grants and liquidity injection to the extension of property tax incentives.

Individual vendors affected by the protest will each receive a Bt50,000 (S$2,170) grant from the government, excluding extra assistance from the Bangkok Metropolitan Administration, Prime Minister Abhisit Vejjajiva said yesterday.

State-owned banks like the Government Savings Bank and the Small and Medium Enterprise Development Bank of Thailand will provide loans to small operators.

Shopping space will be provided to those having businesses in fire-damaged areas.

The government will also open up for public donations to help those who have lost their jobs, and promises incentives to employers managing to maintain their workforce despite financial troubles.

Abhisit said while there were as yet no final figures on affected businesses, the government would focus first on those suffering a complete loss.

The National Economic and Social Development Board said the political unrest had cost the economy between Bt100 billion and Bt150 billion.

However, it still maintains its growth forecast of 3.5-4.5 per cent for this year.

Comptroller-general Pongpanu Svetarundra said the government could dip into its fiscal reserves worth Bt150 billion to finance the remedial measures.

The reserves are expected to rise to Bt350 billion by the end of the fiscal year on September 30, which will be sufficient to accommodate short-term problems, he said.

Finance Minister Korn Chatikavanij yesterday said his ministry would ask for Cabinet approval for another one-month extension for property tax incentives that will expire next Monday.

Commercial banks were closed during the rioting and its aftermath, making it impossible to proceed with loan applications.

The Commerce Ministry has ordered the Business Development Department to extend the balance-sheet submission deadline by a month, until June 30. This will cover companies in the greater Bangkok area.

The Federation of Thai Industries board has endorsed a plan to ask for government assistance in setting up a Bt10-billion fund to help affected workers and entrepreneurs.

FTI chairman Payungsak Chartsutipol yesterday said the fund would be a channel by which the government could help those affected efficiently and effectively.

The FTI will also propose that the government set up a committee to help alleviate mental anguish regarding the economy, for the long-term benefit of society.

Committee members may come from the Joint Public-Private Committee.

"We understand the government is doing its best. The FTI would like to propose these measures to the government to help revive the economy. And if the government has any plans with the same object in mind, the FTI is willing to join with it to return our country to peace," Payungsak said.

Deputy Finance Minister Pruttichai Damrongrat said the ministry was ready to seek both on- and off-balance budgets to aid the measures.

Vendors can also sell goods at the new Government Centre on Chaeng Wattana Road.

A meeting yesterday between the Commerce Ministry and 150 representatives from 35 associations covering 11 businesses saw proposals for loans with at least six months' zero interest, as well as tax measures.

Those in the movie industry said they had lost more than Bt1 billion, while logistics companies said their revenue had dropped 14 per cent.

Deputy Commerce Minister Alongkorn Ponlaboot said these operators wanted extensions in the tax-payment deadline and permission to deduct taxable income at twice the cost of the expense of reconstruction.

They also proposed higher deduction rates on business, household, property and local taxes.

However, Thai Bankers' Association secretary-general Twatchai Yongkittikul opposed the proposed tax deductions, saying they could reduce the Kingdom's tax revenue and damage financial discipline.

"This will ultimately hurt the country's economic growth," he said.

Thai Gems and Jewellery Traders Association president Vichai Assarasakorn urged financial support for exporters to participate in 20 trade fairs to woo back buyers.

Alongkorn said another proposal was for roadshows at international events like the Shanghai World Expo, the Asian Games in Guangzhou and the Fifa World Cup in South Africa.

They also urged government agencies to arrange shopping space.

This weekend, the Commerce Ministry and the Bangkok Metropolitan Association will turn Silom Road into a walking street, with small traders allowed to sell their goods.

Chulalongkorn University is turning some space in Siam Square to a similar purpose, because some traders cannot resume business as a result of the fires.

Abhisit said the government was also negotiating to lease space in the Suan Lum Night Bazaar from the Crown Property Bureau, to help small vendors.

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