An Overhauled ThaiESG Tax Benefit Criteria Provides Higher Limit with Less Holding Period

Thailand’s tax benefit criteria for ThaiESG investments is expected to be revised to further the aim of encouraging savings through capital market investments and incentivizing fundraisers to prioritize sustainability.

Under the proposed changes, investors can benefit from up to 30% of their assessable income with a maximum limit of less than 300,000 baht, a shorter 5-year holding period from the purchase date, and an investment policy that requires more than 80% of Net Asset Value (NAV) to be allocated to specific investment avenues.

These avenues include SET/mai stocks focusing on environment (E) / ESG or greenhouse gas emission disclosure, ESG Bonds, Green Tokens, and Thai stocks in ESG indexes with international recognition.

The expected outcomes of these changes are multifold. Firstly, the increase in the tax benefit limit is expected to spur more investments, with studies indicating that each 10-billion-baht investment in Long-Term Equity Funds (LTF) could elevate the SET Index by 25-27 points. Moreover, the revised criteria provide a savings alternative for new-generation investors, freelancers, and individuals with leftover investment quotas from retirement vehicles like RMFs.

Furthermore, the adjustment in the holding period aims to attract young investors and freelancers who are more open to securities investment risks and seek higher liquidity. This change is anticipated to drive more diverse participation in sustainable investments.

Lastly, the tweak in the investment policy seeks to encourage the disclosure of sustainability-driven operational information by listed companies, broadening the scope of inclusivity and promoting transparency. This will offer investors more value-based information to aid their decision-making processes.