Thailand ranks 18th out of 189 countries for the ease of doing business, unchanged from last year, as measured by lower tax costs for companies, says the World Bank.
“Social security contributions paid by the employer decreased from 5% in 2011 to 3% applicable in January to June 2012 and 4% applicable in July to December last year,” the bank said in its report entitled “Doing Business 2014: Understanding Regulations for Small and Medium-Size Enterprises”.
Reducing the tax rate in terms of social security contribution helps local entrepreneurs, as the move lets them shoulder less of the tax burden.
Providing electricity and protecting investors are two of the areas in which Thailand performs well, the report said.
The country falters, however, in the area of starting a business, which takes 27.5 days compared with three days in Singapore Asia’s best showing.
The report did not take into account Thailand’s corporate tax cut from 30% to 23% last year.
Areepong Bhoochaoom, secretary-general of the Office of the Public Sector Development Commission, said Thailand remains an investment hub but must improve its standards to draw greater investment.
He said state agencies have decentralized power to speed up the business start-up process. The government is in talks with the Bangkok Metropolitan Administration to form a one-stop service center for utilities applications and construction permits.
The government wants to increase the gross domestic product (GDP) contribution of SMEs from 37% now to 40% by 2015, raising their value by 400 billion baht, said Mr Areepong.
Kirida Bhaopichitr, the World Bank’s senior economist for Thailand, urged the country to adopt a new model of economic development, stressing enhanced human resources and value-added products and services.
Singapore ranks the highest in the world for ease of doing business, followed by Hong Kong, New Zealand, the US and Denmark. Other Asian countries in the top 10 include Malaysia (sixth) and South Korea (seventh).
Data collection took place for the first time in Myanmar, which placed lowest in the region for the ease of doing business, ranking 182nd out of 189 overall.