The governor of the Stock Exchange of Thailand (SET) has urged Thailand to loosen regulations and increase competition to bring about equality to give startup businesses an opportunity to grow.
“Laws can be used to punish wrongdoers but they should still be flexible enough to support entrepreneurs,” Prinn Panitchpakdi told an audience of the LSE (London School of Economics) Alumni Association of Thailand held at the British Embassy.
Digital technology is gathering momentum at such a fast pace that the world is expected to become cashless within a decade, Mr Prinn said.
Mr Prinn, who also serves as the country head of CLSA Securities Thailand, delivered the speech which also touched on the opportunities and challenges developing countries face in the digital era.
He indicated that high tax rates also serve as a roadblock to the growth of new businesses in Thailand.
“For example, Jaymart Mobile Co, the largest retailer of electronic supplies and mobile phones, launched an Initial Coin Offering (ICO), a type of fundraiser using cryptocurrency, which could raise over 600 million baht.
“However, the company is required to pay 7% value-added tax (VAT) and 20% corporate tax,” he said. “In Singapore, such a digital asset law does not exist. The Singaporean government allows startups to innovate products before introducing regulations.”
He called for an ecosystem where startups can experiment. Otherwise, the country will not find its “unicorn” startup (a business whose value exceeds $1 billion).
“In Singapore, the government permits the private sector to use public data. Grab was able to launch its innovative ride-sharing service, known as Grab Bus. Yet Grab is still illegal in Thailand,” he said.
Mr Prinn also asked the government to increase competition among digital companies.
“Startups aren’t starting on a level playing field. For instance, the three giant digital platforms, Line, Google, and Facebook pay almost no VAT in Thailand. You can also think similarly about local tourism. Where is the money? It goes to big players, such as Agoda and Booking.com. Why are large companies exempt from taxation? How can we allow this to happen?” he asked.
Mr Prinn said these inequalities reflect the digital divide between the haves and have-mores.