Bangkok, Wednesday 13 February 2019 - SEC is conducting a public hearing on revising the regulations of mutual funds for provident fund investors in response to tax exemptions granted to investment in fixed income. The move is expected to encourage the investors to save money after retirement.
The
Revenue Department has prepared a draft bill amending the Revenue Code relating
to the improvement of income tax payment from investors investing in debt
securities through mutual funds. The amendment was approved by the cabinet on
28 August 2018 and it is expected to be enforced in the middle of 2019. Consequently,
provident funds investing in fixed income through mutual funds will be subjected
to income tax while provident funds are directly investing in fixed income and
still getting tax exemptions.
Thereby,
in order to be consistent with provident funds, the Finance Ministry has
proposed granting corporate income tax exemptions to “mutual funds” whose units
are subscribed solely by provident funds. In light of this approach, SEC is
revising the regulations on establishing mutual funds to accommodate these funds
with the following rules, for example:
- Unitholders
must invest in provident funds only;
- The number
of unitholders which is at least 35 must be waived;
- They
must not be long-term equity funds (LTF), retirement mutual funds (RMF) or
exchange traded funds (ETF);
- Redemption
of investment units can be paid by securities and other assets in lieu of cash.
The consultation paper can be found at www.sec.or.th/hearing. Stakeholders and interested parties are welcome to give
comments and suggestions via SEC’s website,
or facsimile at 0-2033-9660, or email: sumitra@sec.or.th. The public
hearing ends on 22 February 2019.