On 8^th September 2015, the Cabinet approved a resolution to help small and medium-sized enterprises (SMEs)by launching five packages enabling SMEs to reach the source of investment funds,to assist more easily with tax compliance and to increase the capacity of SMEs to compete with big enterprises. The packages under the Cabinet’s resolution are summarised as follows:

1. Loans with a low interest rate for SMEs’ working capital
   
   To relieve the difficulty in reaching the source of funds and to increase financial liquidity for SMEs, Cabinet resolved to extend soft loans of up to 100 billion baht and charging a low interest rate to SMEs for a credit period of 7 years.  The Government Savings Bank (“GSB”) being the state-owned bank, will grant 0.1%-interest-rate loans to the commercial banks and specialised financial institutions which join the project forrelending the loans at no more than 4% interestto SMEs. This is aimed to be implemented by the end of 2015.
   
   
2. Credit Guarantees
   
   To assist SMEs that are struggling to reach investment funds, the cabinet approved amendments to the term and conditions under the Portfolio Guarantee Scheme 5(PGS-5), the Credit Guarantee Scheme.Pursuant to the amended PGS-5, Thai Credit Guarantee Corporation (“TCG”), the government’s specialised financial institutions, will provide SMEs with a credit guarantee in a total amount of 100 billion Baht.  The guaranteed amount for each SME is no more than 40 million Baht with a guarantee period not exceeding 7 years.  TCG will also help a part of Bank’s service fees for SMEs, provided that the SME shall join in this program on or before 30 June 2016.
   
   
3. Contribution of venture capital fundsfor start-up SMEs
   
   To build up a way for SMEs to attain necessary funding, GSB, Krung Thai Bank Public Company Limited (“KTB”) and Small and Medium Enterprise Development Bank of Thailand (“SME Bank”)will cooperate to contribute the venture capital funds totaling 6 billion Baht (being 2 billion Baht for each fund for qualified start-up SMEs).
   
   
4. Tax reduction
   
   To relieve the Corporate Income Tax (“CIT”) of the SMEs, the government currently grants SMEs a waiver of CIT for net profit in respect of the first 300,000 Baht as well as decreasing the CIT rate to 15% for net profit exceeding 300,000 but not exceeding 3,000,000 Baht and 20% for the net profit exceeding 3,000,000 Baht.Furthermore,the cabineth as resolved toreduce the SMEs’ CITrate to 10% for the net profit exceeding 300,000 Baht in addition to the waived CIT of the net profit not exceeding 300,000 Baht for the accounting period for the years 2015 and 2016 with the aim of increasing their capacity to compete with big enterprises.
   
   
   
5. Tax exemption for start-up SMEs
   
   Cabinet has implemented measures to relieve SMEs’ CIT, to increase SMEs’ potential as well as to stimulate the economy in Thailand. In order to facilitate this, Cabinet resolved to grant a 5-year CIT exemption for start-up SMEs which conduct business required for commercial registration pursuant to the Commercial Registration Act B.E. 2499, such as (i) Trading products or service by electronics via internet system, internet services, renting areas for servers, sales of products or services by electronics via internet system, (ii) Sale, rent, manufacturing of CASSETTE TAPES, CD, VDO, DVD or digital VDO for only the entertainment and (iii) Sale of jewellery or accessories decorated with jewellery etc. Provided that the qualified SMEs shall be non-BoI, and have conducted their business and registration in accordance with the Department of Business since 1st October 2015 , they qualify for this tax privilege granted by the Revenue Department.

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