National Agenda: Omnibus legal amendment proposals to improve the structure of the Thai capital market and taxes

As the government of Prime Minister Anutin Charnvirakul has assumed the role of head of the interim government to serve as the government for four months before the dissolution of parliament and the holding of new elections, along with the concurrent amendment of the constitution.

Later on 26 September 2568, the Prime Minister, Mr. Anutin Charnvirakul, along with economic ministers such as Dr. Ekniti Nitithanpraphat, Mr. Atthaphon Rerkpiboon, Ms. Suphajee Suthamphun and Mr. Woraphat Thanyawong I attended a meeting with the Federation of Thai Capital Market Organizations (FETCO) and the Stock Exchange of Thailand. I received 4 proposals from the Federation of Thai Capital Market Organizations: 1. Thailand Story 2. Dividend Tax Exemption 3. New Economic Driver 4. Upskill–Reskill for consideration. I think these proposals are good.

The Stock Exchange of Thailand Board itself has proposed three issues: 1. The cancellation of laws related to licensing and ease of doing business or the guillotine of laws; 2. The drafting of a law to restructure the capital market and financial market of Thailand in the form of an Omnibus Law; and 3. The adjustment of the tax structure, in which some matters may require amendments to important laws at the statutory level.

Initially, after hearing opinions from the Federation of Thai Capital Market Organizations (FETCO) and the Stock Exchange of Thailand, Prime Minister Anutin agreed with Proposal 1, stating that if amendments were to be enacted into law under normal circumstances, they might not be completed within four months. He therefore wished to begin with regulatory reform or the guillotine, which would first be a key government policy. This policy does not require the proposal of legislation through parliamentary processes and is consistent with the proposal of the FTI.

Proposals 2 and 3 of the Stock Exchange are still important. Therefore, I would like to propose the enactment of an Omnibus law, which includes all laws. The government should request cooperation from all political parties and all sectors to support the rapid amendment of the law so that Thailand can escape the trap of legal limitations. This should be done through a Royal Decree, with the reason being economic security that must build confidence and strength in the Thai economy.

A key reason is that Thailand has historically been stuck in the trap of amending each law, which takes a very long time, because there is a process for listening to opinions and evaluating the pros and cons. But in an era where Thailand has many problems, it normally takes 12-18 months for a Thai law to come into effect. Therefore, if it were to take the same amount of time to enact the law, this government would not be able to solve these problems, as time is limited.

Therefore, the government should seek the approval of all political parties for legislation related to capital market reform as a national agenda. Enacting an omnibus royal decree would be beneficial to the country in the long term, both for economic stability and because, after the election, any political party in power can utilize the newly enacted legislation to create sustainable economic stability for Thailand.

First, let me explain the concept behind why omnibus legislative amendments are important.

Legal explanation Omnibus: Comprehensive Law

Omnibus Law is a law that combines multiple areas or laws into a single law, intended to amend, improve, or repeal multiple laws simultaneously. In Thailand, the name "Omnibus Law" has not yet been officially used, but there are concepts and discussions of this type of law abroad, along with examples of some similar draft laws, such as the Business Competition Reform Bill or the Tax and Environmental Reform Bill, but there is no specific name yet enacted or widely used in Thailand.

The Act on Amendments to the Provisions Concerning Criminal Liability of Representatives of Legal Entities B.E. 2560 (2) was enacted. This law amends 72 provisions of the Act, but it took more than two years to draft. Therefore, I think that enacting it as a Royal Decree would be the best solution for the interim government.

Examples of Asian countries that use Omnibus Law in the amendment such as

Indonesia: The Omnibus Law on Job Creation, which amends more than 75 laws on business licensing, environment, employment, taxation, etc., is the best example of success in the region.

Philippines: An Omnibus Investment Code has been enacted to promote investment, but it is not as comprehensive as Indonesia's.

Legal proposals to reform the Thai capital market submitted to the government

As the capital market is a key mechanism driving the national economy, the development of laws governing the capital market is essential to reduce obstacles, increase efficiency, and create transparency in the financial system. The Stock Exchange of Thailand's proposals outline key reform approaches, emphasizing the enactment of omnibus laws to systematically address structural issues (which should be enacted through a royal decree).

With the agreement of all parties, whether government or opposition, and to be considered a "national agenda" for economic stability, there should be sufficient reason for all political parties to agree.

Current situation and problems

The Thai capital market plays a crucial role in economic development. Over the past decade, capital raising through the capital market has averaged approximately 20–25% of GDP per year. However, the Thai capital market still relies on large companies (such as the energy and banking sectors), resulting in concentrated liquidity and investment opportunities. Meanwhile, access to capital for small and medium-sized companies is difficult compared to Singapore and Malaysia, which have measures to attract IPOs and new financial products. This makes the Thai capital market face challenges in regional competition.

1. Outdated laws: The IPO process is complex, time-consuming and involves many laws that are not consistent with the current economic situation, including the Public Limited Companies Act B.E. 2535 (1992), the Securities and Exchange Act B.E. 2535 (1992), and the Revenue Code related to the capital market.
2. Regional competition: Singapore and Malaysian capital markets are more attractive to foreign IPOs and funds than Thailand because of their flexible regulations and favorable tax systems, which are based on disclosure rather than merit.
3. Tax issues: The complex tax system increases the cost of doing business, lacks incentives for long-term investment, and has a large population outside the tax system.
4. Market concentration: Investors still focus on investing in large stocks, while access to capital markets for SMEs and startups is highly limited and lacks access to funding sources.
5. Business operations of registered companies in the form NewEconomy or promoting foreign companies that have received investment promotion to offer shares on the stock exchange

Legal proposals for reforming the Thai capital market : of the Securities and Exchange Commission

1. Pushing for laws to facilitate doing business (or legal guillotine)   We should push for the repeal or amendment of outdated laws and laws that create high costs for the business sector, using an Omnibus Law model. A study by the Regulatory Guillotine Project estimates that if these amendments are successful, they will save the private sector over 1.34 billion baht per year, or approximately 0.8% of GDP.

The process for requesting permission that does not require amending the Act, which has already been implemented by the Urgent Law Reform Committee, both during the time of General Prayut Chan-o-cha and through the Cabinet of Mr. Settha Thavisin, should be repealed. Ministerial regulations and rules should be completely reviewed, as they have all been thoroughly studied. They should be completed within 2-3 months after the Law Reform Committee is established. If joint amendments to the Act are required, the omnibus system I proposed should be used.

2. Pushing for legislation to reform the capital market  Emphasis is placed on opening up to new businesses and new forms of investment, such as New Economy companies, foreign companies that have received investment promotion, new financial products such as DRs, ETFs referencing Carbon Credit, as well as supporting M&A, along with expanding the investor base through savings promotion projects (such as TISA) and strengthening the status of medium-sized and small-sized listed companies (Mid-Cap, Small-Cap). Amendments to secondary laws can be made immediately, but some matters may need to be amended in the Act, so a Royal Decree must be enacted.

3. Tax restructuring to support the capital market It proposes tax exemptions for mergers and acquisitions, tax deductions to encourage savings and investment, and the use of eTax-Filing and eTax-Invoicing to reduce official discretion, increase transparency, and enhance the efficiency of the tax system. It also proposes income tax exemptions or dividend tax reductions for companies listed in the Jump+ project and those that will become New Economy, or companies that combine eTax-Filing and eTax-Invoicing.

Some matters can be amended by secondary laws, such as royal decrees or ministerial regulations, which can be done immediately in this government. However, some matters may need to be amended by Omnibus Law, amending secondary laws to completion or, if necessary, amending them.

Expected impacts if the government makes amendments according to the proposal    

These proposals, if implemented, are expected to have positive effects in many dimensions, including increased investor confidence, lower costs for listed companies and increased competitiveness, overall economic stability and increased attraction for foreign investment.

For Thailand, the Omnibus Law should be expedited, along with investor protection measures, to strike a balance between liberalization and economic security. I believe it should be enacted as a royal decree, citing the "economic security" principle under Section 172 of the Constitution, with the approval of all political parties. It should be made a national agenda, and the legislation should be completed within four months before the dissolution of Parliament.

The Thai capital market faces challenges in competing with global capital markets. The proposed Omnibus Law reform is a systematic approach to address these structural limitations. However, implementation requires cooperation from all sectors, including the government, opposition, business sector, and the public, to create balanced, transparent, and sustainable laws.

Deep Impact

To investors

Retail investors: enjoy tax benefits such as TISA and new financial products that are more accessible, saving through investments.

Institutional investors: Gain greater confidence from strong regulatory systems and transparency.

Foreign investors: Incentives from streamlined legal processes and tax benefits make Thailand more attractive as an investment hub.

To registered companies / Companies that will raise capital

– Add foreign companies and companies in the Health Care, Technology Research sector to be listed in the new market that the Stock Exchange is implementing.

– Reduce costs from mergers and acquisitions (M&A) with tax and fee exemptions.

– There is an incentive for foreign companies or companies with good performance to register if they can issue dual-class shares, just like in foreign countries.

– Mid/Small Cap companies have greater access to capital through the Jump+ program and support funds.

To the overall economic system

– Elevate Thailand to become a financial hub of the region.

– Enhance competitiveness in the global capital market, especially in the digital economy and green economy.

– The government has increased its revenue from expanding its taxpayer base and using the eTax system, helping to create sustainable fiscal stability.

Scheduled Action (TIMELINE) as follows

In consideration, the following should be considered:

1. Remove regulations that are obstacles to doing business or capital markets within 3 months.
2. Accelerate the enactment of the Omnibus Law for capital market and economic reform by 2568.
3. A special task force was established, involving the government, the business sector and opposition representatives, to draft legislation and monitor its implementation.
4. Amend the Securities and Exchange Commission Act and the Public Company Act to support innovation and new businesses, including allowing Dual-Class Shares and increasing flexibility in mergers and acquisitions (M&A).
5. Simplify the tax structure, make it more transparent and provide incentives for investment, such as reducing M&A taxes, exempting dividends from taxes in some cases, and supporting eTax-Filing.
6. Establish strong investor protection mechanisms, such as the One-Strike-Out Rule, to prevent Insider Trading and increase market confidence.
7. Expand the investor base through the TISA project and promote youth savings to create a new generation of investors and increase long-term market liquidity.
8. Restructuring Thailand's tax structure to increase government revenue. A plan to increase taxpayers, whether individuals or juristic persons, can be accomplished by providing appropriate benefits to taxpayers, adjusting appropriate rates, using technology in tax payment, and reducing discretion. A study of tax structure reform during the National Reform Council era has already been conducted, which can be applied and amended simultaneously. This includes revising inheritance taxes, property taxes, and building taxes to generate government revenue.

conclusion

I believe that only by removing legal traps through the Omnibus Law process, through the enactment of a Royal Decree, will the future survival of the Thai capital market and economy be the only way forward.