The state-owned Thai Credit Guarantee Corporation (TCG) has cut its annual fee for loan guarantees for small and medium-sized enterprises (SMEs) that sign up for the Revenue Department's single financial account scheme.
The fee reduction is aimed at encouraging accurate financial reporting by SMEs, said TCG president Rak Vorrakitpokatorn.
SMEs that register for the scheme, which runs through June 30, will be exempt from the annual fee for the first year when using TCG's credit guarantee service, then pay just 0.5% of the guaranteed amount for the second and third years and 1.50% during the fourth to 10th years, Mr Rak said.
TCG normally charges a 1.75% annual fee.
The department introduced the single account scheme in 2016, but some of the 460,000 SME operators that registered for the scheme that year to get a backdated tax payment exemption have continued to understate their income tax bills.
In addition, Siam Commercial Bank, Bangkok Bank, Krungthai Bank, Bank of Ayudhya, Thanachart Bank and United Overseas Bank Thai are cutting interest rates to 5% for two years for SMEs taking part in the scheme, Mr Rak said.
Thailand has 2.5 million SMEs, 7% of which submit income tax filings, he said.
Some 13% of SMEs register as juristic persons with the Commerce Ministry, said Mr Rak.
A meagre one-third of SMEs can access resources from financial institutions, he said.
Their contribution to the country's GDP will increase to at least 50% from 40% at present if more of them can access formal financing, said Mr Rak.
The single account scheme is an opportunity for SMEs that have more than one financial account to consolidate into a single account, but they must pay delinquent tax in exchange for a waiver of late-payment penalties, said Ekniti Nitithanprapas, director-general of the Revenue Department.
He said 26,000 SMEs signed up to sort out their financial accounts during 2016-17.
SMEs with income of up to 500 million baht a year are qualified to join the scheme.
The central bank also requires banks to consider only financial statements submitted to the Revenue Department when considering SME loans.
