The Finance Ministry and the Bank of Thailand have confirmed that the deadline for requiring banks to use financial accounts submitted to the Revenue Department by small and medium-sized enterprises (SMEs) for loan approvals is still on track for the start of next year.
The government and the Revenue Department have no policy to put off the deadline, said Ekniti Nitithanprapas, director-general of the Revenue Department, adding that the new lending practice for SMEs to comply with the single financial account scheme will start on Jan 1, 2019.
His remarks came after some local media reported that the central bank would delay implementation of the new lending approach to SMEs for three years. The Bangkok Post reported that the Bank of Thailand was sticking to its Jan 1 deadline but offering a three-year grace period for full compliance.
Mr Ekniti said the single financial account requirement for SMEs is international practice and the department has prepared for its adoption for a few years, always promoting the issue to build understanding among SMEs and help them prepare for the single account scheme.
The scheme is among the government's policies to foster good governance, he said, and the state has enacted a royal decree requiring SMEs to adopt a single financial account.
Under the single account scheme, the Bank of Thailand requires banks to give greater consideration to financial statements submitted to the Revenue Department when considering SME loans, starting next year.
The requirement, however, has stoked concerns that the single account scheme will lessen access to finance for most SMEs, which tend to use more than one financial account and submit the smallest one to understate or avoid tax burden.
The Finance Ministry in 2016 allowed SMEs that intended to use a single financial account to sign up with the Revenue Department and receive a temporary tax break in return for compliance.
Earlier, finance permanent secretary Prasong Puntanet said that when he was director-general of the Revenue Department, it surveyed 70% of the 400,000 SMEs who registered to participate in the single financial account scheme and found that some were still conducting business using more than one account.
"We don't have a policy to postpone the requirement for banks to use financial accounts submitted to the Revenue Department to be used as documentation for loan consideration for SMEs, as stated in the royal decree, and a delay would have a wide impact on tax collection and the policy to promote good governance," Mr Ekniti said.
Bank of Thailand assistant governor Somboon Chitphentom said the requirement for banks to use financial accounts filed with the Revenue Department as documentation for SME loan approvals will start on Jan 1 as scheduled.
"The report that the Bank of Thailand will relax regulations for SMEs that aren't ready to comply with the single financial account by delaying the requirement for three years or to 2021 was a misunderstanding," Mr Somboon said in a release.
But the central bank didn't comment on whether it would offer a three-year grace period for SMEs to fully comply.
