Executive director Anusorn Muttaraid told The Nation last week that the Bt77-billion power supply and electronic components company, whose earnings come mostly from abroad, should not be subjected to Thai corporate income tax.
The company has raised this issue with many governments in the past and the current one. Its message is that Thailand should amend its tax regulations to match the laws in Malaysia and Singapore, as it is encouraging local companies to venture abroad.
Delta will have to make a decision before the Board of Investment’s tax privileges for its factories expire in three to four years.
“Now there’s still time. We’re still discussing with the government,” he said.
Delta has nearly 10,000 employees at its Thai factories – half of its workforce five to six years ago – due to automated systems displacing workers.
The company has also increasingly expanded overseas, shifted to higher value-added products and improved its profitability.
Its net-profit margin has been well over 10 per cent and its return on shareholders’ equity exceeded 20 per cent over the past three years. It earned Bt5.4 billion on revenue of Bt42 billion last year.
Delta derives more than half of its revenue from Europe, where it has research and development and manufacturing facilities in Germany, Slovakia, Switzerland and other countries. Other major sources of revenue are India and the Americas.
Taiwan-based Delta Electronics holds 27 per cent of the company, which is listed on the Stock Exchange of Thailand.
The tax regime discourages companies from repatriating overseas profits to Thailand, while Singapore and Malaysia don’t touch such flows. The tax regime will undermine the government’s policy to promote international expansion by local companies, particularly small and medium-sized enterprises.
“We are only asking for what Singapore and Malaysia are giving.
“We have talked with the BOI, telling them that we don’t have any need to stay in Thailand. If I were not Thai, we would have left the country some time ago,” he said.
Delta has set a target of 10-per-cent profit growth per year, although this year is a challenge as the market for power-supply systems for computer networks might not grow as expected.
Since the beginning of this year, the parent firm in Taiwan has started to collect royalties on selected products made here, but Delta believes it is worthwhile because it will be updated and engaged in the stages of product development.
As for its marketing direction, Delta is trying harder to boost its sales aggressively in Asean, with the goal to double sales in the region in three years. It will also bring in more products from the parent firm to distribute in the region.
Delta’s product lines include cooling fans, electromagnetic interference filters and solenoids. Its key power management products are switching power supplies, DC-DC converters and solar inverters. The products are used in automobile, medical, telecommunications, information technology, automation and other applications.
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