The Law Society of Thailand is gathering signatures to support its proposed bill seeking to limit certain police powers provided by the Criminal Procedure Code. Under the current law, police investigators with a court order may detain an individual suspected of a crime for 84 days before taking them before prosecutors. The law society has opined that this lengthy detention period and detainees inability to learn of the charges against them until they appear in court are violations of individuals' human rights. In response, they are drafting a bill that would hasten the process and will name the bill after Somchai Neelahphaijit, the Muslim lawyer who was abducted by police earlier this year.

BoI promoted businesses that export more than 80% of their production will no longer be automatically granted tax holidays. The BoI, citing concerns about a potential export subsidy problem, had stopped granting this tax benefit to new businesses in 2000 and will now end them altogether. In fact, the World Trade Organization Agreement on Subsidy and Countervailing Measures had ordered a halt to such practices in 2002. The WTO then allowed Thailand, as a developing country, to continue providing such incentives until January 1, 2005. 581 BoI promoted companies will lose such tax incentives. However, the BoI continues to provide exemptions for equipment and machinery imported to Thailand for industrial purposes. Furthermore, new incentives have been created to promote wafer fabrication and integrated circuit and hard disk manufacturing, and to strengthen the local film industry. The wafer fabrication industry will receive the greatest tax benefits, as it a target export industry. The film industry may receive tax breaks on imported film equipment. Automotive assemblers will be the final industry to lose their protection in an effort to protect that industry from passing on its tax burden to other sectors of the automotive industry in Thailand.

The Finance Ministry has announced that the minimum amount for employee monthly contributions to company provident funds will be increased to five per cent, up from the current rate of three per cent. This measure will help to encourage long-term savings and to prevent the current account from slipping into the red. As a form of incentive, the Ministry would also increase the maximum contribution deductible from personal income tax to Bt500,000 per annum. An increase in domestic savings at a rate of 10 per cent per annum is targeted. The increased savings would result in lower consumption, especially in the luxury goods sector, thus enabling Thailand to cut down on its capital goods import. To prevent the current account from falling into deficit as a result of mounting imports, authorities have been instructed to amass five-year investment plans from both private and government sectors to ensure the balanced and efficient allocation of investment among industries.

A new law is expected to pass soon that will increase property taxes in the Kingdom. A source at the Fiscal Policy Office stated that while some of the tax rates are expected to increase by a large percentage, the actual percentage of taxes in relation to property values would remain quite low. For example, the taxes on rental revenues will actually reduce lower tax rates a small percentage, but exemptions from the law will be eliminated. Technically the tax rates will be lower, but they will be set to the property value rather than the income from leasing or renting the property. The rate, currently set to 12.5% of rental revenue will be capped at 0.1% of the property value, and will be determined by local government administrators. Furthermore, a two to three year grace period will be instituted to phase in new taxes.

With the objective of increasing long term savings, the Ministry of Finance intends to raise the maximum monthly employee contributions from the current 3 percent to 5 percent. According to officials this should have beneficial effects on capital investment and the economy as a whole. Additionally, the Finance Ministry stated that it would also increase the maximum deduction for contributions to provident funds that may be deducted from personal income tax from the existing 300,000 baht to 500,000 baht per year.

After the Trade Competition Board agreed upon a new definition for "dominant player" in May 2004, a cabinet screening committee subsequently rejected the definition in mid July. The new definition would have raised the market share requirement from 33% to 50% for individual companies and up to 75% for any three separate companies combined. The reason behind the denial was its potential to limit the growth of large companies and state enterprises. An official from the Trade Department conceded that the business environment had changed since the Trade Competition took affect in 1999. However, without a clear definition of "dominant player" there is expected to be continued difficulty enforcing the law against large companies that unfairly impair competition as a result of their strong market position.

New ministerial regulations were enacted regarding protection for goods from specific geographic origins. Rice, silk, wine, and liquor which have identical or similar geographic indications as those products already registered, as well as products which are already registered but are from different geographic origins, must clearly specify the geographic origin and country of manufacture at the end of their geographic indication. The regulations govern the rules for both applying for registration and protesting against previously registered goods. Submissions must be submitted to the Department of Intellectual Property, Ministry of Commerce or relevant Provincial Commercial Office. In evaluating applications, the Ministry will evaluate, among other things, details concerning quality, reputation, relationship between the goods and the geographic origin, and location of the geographic origin.

The Stock Exchange of Thailand (SET) has approved the creation of the Investor Protection Fund (IPF) to protect the assets of individual investors in the event their brokerage house cannot do so. The SET will deposit an initial 300 million baht in the fund as start up capital and brokerage houses will be required to make monthly deposits in proportion to the value of stock they trade in that month. Brokers that join the IPF before Jan 1, 2005 will be exempt from the entry fee that will begin next calendar year and increase every six months following that date. The purpose of the IPF is to maintain investor confidence and develop the infrastructure of the market. However, particular details, such as the policies for coverage and the structure of the IPF have not been finalized. In a related development, the SET has also established the Federation of Capital Market Associations, an organization of interested individuals such as investor associations, listed companies, brokerages, and security analysts.

A bill has been proposed to replace the blanket guarantee on bank deposits that was established in the wake of the 1987 financial crisis. The Bank of Thailand has suggested that the time is right for the new, limited coverage Deposit Insurance Agency. The reduction in non-performing loans and the strength of the economy were reasons cited for the appropriateness of the change in bank deposit insurance. The central bank expects the number of non-performing loans (NPLs) to fall from its peak of nearly 12% of all loans to only 4% by 2006. A Bank of Thailand representative supports that assertion, as the state-owned Asset Management Corp will begin buying bad loans out of the system soon. If approved, the DIA would replace the Financial Institutions Development fund that was created to bail out banks and other financial institutions in the years following the 1987 financial crisis. Under the new agency coverage will be limited to 1 million baht per account. Parliament was scheduled to receive the draft law in August.