Thailand has launched an environmental, social and governance fund scheme with tax incentives that is expected to attract as much as 210 billion baht (US$6.2 billion), mostly transfers from the Long-term Fund (LTF), the Bangkok Post reports, citing Pichai Chunhavajira, finance minister of the Southeast Asian nation.
The new fund is aimed at providing an alternative for investors who held the LTF for the ten-year compulsory period which ended in 2024, Pichai is quoted as saying in the report on March 12.
This is the second ESG fund introduced by the government. The first was in 2023 and also offers tax incentives, as does the LTF.
Pichai says 180 billion baht or 75% of LTF funds are expected be transferred to the new ESG fund, along with a fresh infusion of 30 billion baht.
But according to Kasem Prunratanamala, head of research at CGS International Securities in Thailand, those estimates are “a bit too optimistic”.
“We expect only half of the LTF to be transferred to the new Thai ESG Extra, and about 10 billion baht of new money to go into the Thai ESG Extra,” Kasem says.
LTF investors who switch entirely to the Thai ESG Extra are eligible for personal income tax deductions of up to 500,000 spread out over five years.
In addition, those who put additional money into the fund will be eligible for a one-off tax deduction of up to 300,000 baht, provided the investments are made between May 1 and June 30 this year.