Breaking News! A Stock-Trading Taxation will be back after 30 years with 0.1% tax rate

Big fans of stock trading check this out! The Council of Ministers has announced about the stock-trading taxation after the exemption for more than 30 years. This announcement affects the investors in the stock market because of the burden caused by the complexity of expenses. Let’s take a look at an in-depth detail of the stock-trading taxation and the effect on the investors.

The Ministry of Finance proposed the 0.1% tax rate for stock-trading taxation, which will gain from stock selling. For example, if the stock you want to sell has a value of 3 million baht, you have to pay tax for 3,000 baht. The Council of Ministers has approved the bill in principle, but it is not effective immediately due to the wait in procedure from the Council of State. This law is expected to go into effect in the second quarter of 2023. This law will have an effect on 3 of the stock groups which are;

  • Stocks with high PE will have fewer trading rounds.
  • Stocks in the brokerage sector are likely to be affected by lower operating performance.
  • Stocks with a high margin of trading.

For the 0.1% stock-trading taxation, the tax will be collected from the share sale transaction, which is calculated based on income before any expense is deducted. The payment tax is at the rate of 0.1% of the value sold. After the initial enforcement of the law, a 0.055% tax will be levied as an adjustment Then, a normal 0.1% tax on the sale of stock will be levied because it is a specific business. In addition, if a broker is the collector of the fees from a stock trader, he will have to collect the fees from the stockbroker as well. There was a tax exemption on the sale of stock in 1991 in order to promote investment in the SET. If the stock-trading taxation returns, it is expected that the Ministry of Finance’s revenue will increase by 10 billion baht.

The stock-trading taxation will have an exemption in some mutual funds such as Provident Fund, Government Pension Fund and Social Security Fund. In addition, there will be a proposal of details in taxation to the Ministry of Finance so that there will be no duplication of taxation from certain investors.

The effect after the 0.1% Stock-Trading Taxation

Although the government is able to generate 1-2 billion income a year, the consequences will be that it may make people want to buy fewer stocks. It is important to observe in other related businesses, as every stock transaction has a higher cost. It also increases the burden on investors.

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