Tax exemption envisaged for technology venture capital funds

0


[ad_1]

Tax exemption envisaged for technology venture capital funds

Part of the effort to boost startup investment

The Ministry of Digital Economy and Society (DES) urged relevant agencies to consider capital gains tax exemption for venture capital (VC) funds investing in local tech startups , as another driver for investment in startups in the country.

The move is also part of the strategies to create a digital business ecosystem and improve the country’s competitiveness.

The government is also preparing for the development of digital infrastructure, especially platforms to help strengthen small and medium enterprises (SMEs) as well as national digital identification and cybersecurity.

DES Minister Chaiwut Thanakamanusorn said the government is aware of the importance of digital technology as one of the key factors in boosting economic growth and national development.

According to the IMD Digital Competitiveness Index, Thailand was ranked 39th in 2020, dropping from 40th in 2019.

The DES ministry expects to see a better ranking of the country’s competitiveness for 2021, or three consecutive years of improvement from 2019, he said.

Mr. Chaiwut said that startups and SMEs still face many obstacles.

For startups, one of the issues is the existing capital gains tax, which discourages venture capital funds from investing in local startups as they have to be taxed for gains from the sale of shares. in startups in the future, he said.

Capital gains tax pushes local startups to register overseas to attract venture capital funds of funds, especially in Singapore where capital gains tax is eliminated for venture capital funds that invest in startups.

“I have discussed this informally with the Minister of Finance on two occasions during cabinet meetings, but this issue has not yet been settled,” said Mr. Chaiwut.

According to him, local SMEs face limitations in adopting technology applications, accessing sources of finance and expanding businesses through innovation.

The government has defined guidelines to help SMEs to cope and improve their competitiveness through various projects with the cooperation of the private and public sectors.

The Electronic Transactions Development Agency (ETDA) presented its National Strategic Plan for Electronic Commerce for 2021 and 2022, aiming to raise the country’s Ease of Doing Business Index to the top 20 by next year .

Thailand was ranked 21st out of 190 countries in the World Bank’s 2020 Ease of Doing Business ranking.

The plan focuses on four core development programs: digital ID support, digital services and digital cross platforms, the e-transaction standard and the e-transaction intelligence center.

For digital ID support, it focuses on online identity verification as an important feature that would support e-commerce transactions.

ETDA also supports electronic transaction standards that would promote electronic transaction and e-commerce practices, which could ensure security, confidentiality and accountability.

Contractors will be supported by compliance guidelines.

SMEs face various challenges in a rapidly changing business world, according to Mr. Chaiwut.

The Digital Economy Promotion Agency (Depa) continues to support 900 projects aimed at facilitating digital adoption. The projects generated 20 billion baht in economic value.

The projects support digital adoption among SMEs, stores and community vendors.

Since 2018, 5,492 SMEs and businesses have adopted digital platforms and solutions, including e-commerce platforms and point-of-sale technologies.

Mr. Chaiwut said 1,000 startups have engaged in digital promotion projects since 2018, including 112 in Depa’s startup portfolio.

[ad_2]

Leave A Reply

Your email address will not be published.