BANGKOK — Prime Minister Srettha Thavisin has instructed the Revenue Department, the Ministry of Digital Economy and Society (DE), and the Royal Thai Police to investigate the Chinese e-commerce platform Temu’s entry into the Thai market and other global markets. There is concern that money might be sent back to China without paying taxes to Thailand.
On August 6, Phumtham Wechayachai, Deputy Prime Minister and Minister of Commerce, explained that we need to understand that the global trading system is changing and online trading is on the rise, which aims to cut out the middleman to maximize benefits for consumers.
Such systems are developing globally and have an impact on individual countries. It is therefore necessary for us to monitor this. As for the Temu platform, it has only been on the market for two weeks. The Ministry of Commerce has been tasked by the Prime Minister to monitor this matter as part of its duties.
We are currently preparing for a meeting of three ministries: the Ministry of Industry, the Ministry of Health and the Ministry of Commerce, including the Department of Foreign Trade. This involves products that are sold, such as food and drugs, which require discussions with the Food and Drug Administration (FDA) to ensure strict standards. The Ministry of Industry will review the industry standards (TIS).
All measures must comply with World Trade Organization (WTO) rules and we will look at how we can protect ourselves. We assure you that we are not neglecting this matter and are actively looking into it.
Phumtham emphasized that we need to keep pace with changes in the world by changing laws and processes. It is not about resisting, but about enforcing the laws to better protect Thai consumers. There are both positives and negatives to consider and we should not see this as a zero-sum game. We already trade durians and other goods with China. As the rules of global trade change, Thailand needs to keep abreast, monitor the situation and develop preventive measures.
When asked if there will be measures to ensure that Temu pays taxes in Thailand, Phumtham said that there is no concrete evidence yet of how much money is being transferred abroad. This is the responsibility of the Ministry of Finance. He has instructed the Ministry of Commerce to discuss tax measures with the Ministry of Finance in accordance with WTO rules.
Prasert Chantaruangthong explained that Temu was registered with the Electronic Transactions Development Agency (ETDA) at the beginning of July. The authorities monitor whether the platform’s direct sales from factories lead to lower prices as the goods are not branded. They must consider factors such as product quality, as discounts can be as high as 90 percent. The competent authorities must monitor these aspects closely.
The DE Ministry will focus on platform-related issues such as returns and logistics, while quality and standards will be overseen by other regulators. The large number of products sold through the application cannot lead to a blanket shutdown due to a few substandard items.
According to Momentum Works, a business consulting service provider in Singapore, the value of Thailand’s e-commerce market in 2023 was 19 billion US dollars, growing 34.1% from the previous year. This makes it the second-largest market in the region, after Indonesia. In 2023, Shopee dominated the e-commerce market share in Thailand with 49%, followed by Lazada at 30% and TikTok Shop at 21%.
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