Thailand is grappling with substantial capital outflows and mounting pressure on its small and medium-sized enterprises (SMEs) as foreign digital platforms dominate e-commerce, food delivery, and streaming sectors. These international players often impose hefty commission fees, sometimes exceeding 40% of sales, alongside advertising costs, severely squeezing profit margins for local businesses.
The Bank of Thailand has acknowledged these significant capital outflows, partly driven by foreign entities repatriating profits. Compounding the issue, the Thai tax system faces challenges in collecting corporate income tax from these platforms, many of which are structured to minimize their taxable presence in the country, contributing to base erosion and profit shifting (BEPS).
Furthermore, an influx of cheap imports from China, facilitated by platforms like Temu and Shein, is creating a ‘China Shock 2.0’ scenario, undercutting Thai manufacturers. While a tax loophole for low-value imports was set to close on January 1, 2026, economists caution that tax measures alone may not suffice, as large foreign operators could potentially absorb these costs.
Thailand faces the critical challenge of nurturing a digital economy that not only fosters innovation but also actively supports its local businesses and ensures a fair and effective tax regime for all participants.
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