Cabinet to discuss assistance measures for smaller industries

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BANGKOK, Jan 5 – A “relief package” to help smaller enterprises impacted by the nationwide minimum wage hike to Bt300 will be tabled to the cabinet on Tuesday, according to Labour Minister Phadermchai Sasomsub.

He said the proposed measures which were wrapped up by economic-related ministries – finance, labour, commerce and industry – include a reduction of the withholding tax from 3 percent to 2 percent for small- and medium-sized enterprises (SMEs) and allocation of budget to the Skill Development Department to set up “mobile clinics” to train unemployed or unskilled workers for local industries.

The lower withholding tax will cost the government Bt20 billion, he said, adding that the already-announced reduction of corporation income tax to 20 percent will help boost entrepreneurs’ revenue. The state currently earns Bt60-70 billion from the collection of withholding tax each year.

Other measures include a reduction of fees collected from provincial hotels and resorts from Bt80 per room to Bt40 per room, additional budget for state agencies to hold seminars at provincial venues to spur the economy at tourist attractions, and the Commerce Ministry’s activation of its mobile units to sell goods at cheaper prices to people especially workers at factories.

He admitted that the minimum wage increase will force more businesses to close down, but boosts workers’ purchasing power.

Mr Phadermchai said the closure of Veena Garment which resulted in 287 workers losing their jobs was a consequence of the European crisis because the company mainly exported underwear garments to Europe.

Export order had been exhausted since 2010 and it was unrelated to the minimum wage increase, he said.