OECD net negative
Re: "A taxing question", (Business, Dec 16).
There are good reasons why many of Thailand's regional peers have shown little interest in joining the OECD. For all the talk of the OECD being a consensus-based organisation, it is not an Asean-style body with a strong doctrine of non-interference.
The policies imposed on Thailand by the OECD may well harmonise Thailand with other OECD member nations, but it equally risks making Thailand much less competitive in its own region. Malaysia, free from OECD residency-based taxation policies, is already luring Thailand's long-stay tourists by actively promoting their country's tax exemption on foreign-sourced income and stable remittance-based taxation system. Singapore and Hong Kong, unconstrained by OECD policy, have retained their territorial taxation system and have cemented their positions as regional financial hubs. Vietnam, in the absence of incompatible OECD labour/climate/social policies, is poised to overtake Thailand as one of the region's main manufacturing hubs.
As to the suggestion that OECD ascension process is likely to reduce Thailand's dependence on tourism, there seems little evidence for that. If anything, the adoption of OECD tax policies is likely to erode Thailand's lucrative long-stay tourism and retirement hub that has been decades in the making and generally makes Thailand a less attractive tourist destination.
Greece's membership of the OECD did not save it from total economic collapse in 2009. Turkey's OECD membership did not help it avoid an economic and currency crisis in 2018. Colombia's OECD membership did not deliver it from a credit rating downgrade earlier this year. It is naive to think Thailand's economy will benefit by adopting OECD ascension policies. As for increasing inward investment, it is laughable to suggest that Thailand will somehow attract more inward investment by adopting OECD tax and other policies. These are the very policies that drove many companies and high-net-worth individuals to flee the West.
Of course, Thailand needs policy reforms. But forcing Thailand to accept ill-suited policies imported directly from a western supra-national body like the OECD sells Thailand short. It is administratively lazy, undemocratic, and does not serve the best interest of Thailand.
