The COVID-19 pandemic is bringing significant disruption to both the Thai and global economies, perceived as one of the most serious economic setbacks by the private sector. According to the recent CEO Survey by Krungthep Thurakit newspaper, a majority (43.7%) of CEOs said their organisations faced medium impact from the outbreak, 20.1% were severely affected, 30.7% felt minor impact and only 5.5% saw no impact at all.
Grant Thornton in Thailand will constantly update relevant information including the advice to businesses to help you navigate through these difficult times.
While there may be some industries that are more directly impacted by the virus – including health and aged care, education and tourism – and no way to predict how many people may contract the virus, all industries will face issues around supply chain, workforce and cash flow.
With specialists across business risk, business continuity, workforce, tax, compliance, supply chain and restructuring, we are here to help. This may be an assessment of your risk and cash flow, identifying alternative suppliers, or preparation for meetings with suppliers, banks or the related government agency to access additional support or extensions.
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The Thai cabinet has thus far approved two stimulus packages to mitigate the impact of the Covid-19 outbreak. The most recently announced package of 24 March 2020 aims to increase liquidity for businesses and individuals.
- Loans up to THB 3 Million for SME at 3% interest rate for the first two years
- Date for filing corporate income tax extended to August (Por Ngor Dor 50) and September (Por Ngor Dor 51)
- Filing of other taxes for affected operators extended by three months
- Filing of excise tax by service businesses extended by one month
- Filing of excise tax for oil products operators extended to the 15th of the following month for the next three months
- Exemption of import duty for products related to the prevention and treatment of Covid-19
- Exemption of taxes and fee cuts for debt restructuring with non-financial institution creditors
- THB 5,000 a month for three months for approx. three million workers not covered by the Social Security Fund (SSF)
- THB 10,000 emergency loan per person at 0.1% monthly interest (no collateral required)
- THB 50,000 special loan per person at 0.35% monthly interest (collateral required)
- State-owned pawnshops to charge a lower rate of interest i.e. 0.125% per month
- Date for filing personal income tax extended to August 2020
- Deductions for health insurance premiums increased to THB 25,000 from THB 15,000
- Tax exemption on risk payments for medical workers
- Training for income earners
On 20 March 2020, the Monetary Policy Committee (MPC) of the BOT announced its decision to further cut the policy rate from 1% to 0.75%, effective 23 March 2020. This follows the previous cut from 1.25% to 1% announced during its first meeting on 5 February 2020. The MPC expect this to reduce the interest burden on borrowers affected by the COVID-19 pandemic and to alleviate liquidity strain in the financial markets.
Source: BOT Press Release
- Monetary Policy Committee’s Decision - Special Meeting (English language)
- Monetary Policy Committee’s Decision - Special Meeting (Thai language)
Simultaneously, the BOT requested commercial banks to release aid measures for clients whose businesses are affected by the Covid-19 outbreak. The central bank has also demanded all financial institutions to ensure continuing financial services to minimize any coronavirus-related disruption. More details can be found from sources below:
- Aid measures from financial institutions for those affected by the current economic downturn (BOT website, Thai language)
- BOT tells banks to help, as COVID-19 spreads (National News Bureau of Thailand, English language)
- BoT demands all banks provide 7 key services (Bangkok Post, English language)
We anticipate there will be following measures if the impact continues and will add to this as more information becomes available.
Business continuity plans and crisis management
The current situation continues to evolve and businesses will need to remain agile and alert. A good starting point on creating a response to COVID-19 is the World Health Organisation’s technical guidance and the Department of Disease Control which has released guidelines on how to mitigate the spread of COVID-19.
Some areas to consider include:
- Have measures been put in place to support good hygiene and health for your people, including restrictions to international travel, advice on attending client meetings, site visits and events?
- Do you have a clearly communicated policy on what your people should do if they are feeling unwell – including seeking medical attention and isolation? What will this mean for colleagues and clients if you suspect a case of COVID-19?
Review your customers and suppliers
- Do you need to inform your clients and customers of any changes to your services? This could include different opening times, delays in deliveries or deadlines.
- Do you have plans in place to ensure regular and clear communications to clients about your policies and updates on changes to service?
- With international travel and export impacted by COVID-19, have you assessed the strength of your supply chain and do you have alternatives in place if you need to source another provider?
- Which customers will need extended terms from you and which suppliers might require different arrangements? Liaise with your suppliers to determine how they can support you.
Cash flow and financing
- Any changes or delays in service can have an impact on cash flow. Do you need to have discussions with clients or suppliers about renegotiating terms?
- Your banker will be invaluable in helping you over the next couple of months. Plan early if you are going to need additional funding to get restarted. Make sure your banker is across your plans and understands where you are going.
Check your insurance cover
- Re-assessing insurance coverage – businesses may have insurance coverage to protect certain assets, however, they should ensure they are covered for the business interruption expenses that natural disasters can cause.
- During these difficult periods, proactive stakeholder management becomes extremely important, in particular with financiers, shareholders, customers and employees. Communicate with these groups early and often!
Get advice and look after yourself and your people
- In addition to ensuring the health and safety of yourself and your people, we strongly encourage you to speak to your advisors about how your business can respond to COVID-19.