Thailand Offers Tax Incentives to Bolster Slumping Stock Market

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Anuchit Nguyen

Tue, Mar 11, 2025, 3:30 AM 2 min read

(Bloomberg) — Thailand will provide tax incentives for investments in the nation’s equity market that has underperformed peers this year amid foreign outflows.

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Individuals will get a tax allowance of as much as 300,000 baht ($8,800) for their new investment in equity funds, called ESG X, Finance Minister Pichai Chunhavajira said at a press conference after a Cabinet meeting Tuesday.

The so-called sustainable funds, expected to be launched by June, will invest in shares of local companies with good ratings in the segment, he said.

The SET Index dropped as much as 1.4% on Tuesday before paring losses to 0.6%, putting the benchmark on course to close at its lowest level in about five years. The gauge has slid more than 16% this year as weak economic growth and corporate earnings weigh on market sentiment.

The measures come as foreign investors continue to sell local stocks, withdrawing $754 million in 2025. Rising market volatility due to a global tariff war is particularly increasing risks for countries such as Thailand that have a trade surplus with the US. Prime Minister Paetongtarn Shinawatra has appealed for “closer” cooperation between policymakers to shore up the nation’s growth.

Holders of expiring long-term equity funds worth about 180 billion baht will also be offered tax allowance to switch into the new ESG X funds as redemptions can put more selling pressure on the broader stock market.

They will receive tax breaks of as much as 500,000 baht and will have to lock their investments in the new fund for five years, the finance minister said.

The latest measures follow steps last year to increase tax breaks and reduce lockups for individuals investing in ESG funds to boost stocks.

The government is also considering a new decree to tighten its crackdown on irregularities in stock trading and companies. Fast tackling of malpractice will help revive investors’ confidence in the financial markets, Pichai said.