Bangkok: The government is taking decisive steps to prevent large corporations from delaying payments to small and medium-sized enterprises (SMEs) by revising credit terms for various sectors. The new guidelines set a maximum payment period of 30 days for agricultural goods and 45 days for trade, manufacturing, and services.
According to Thai News Agency, Deputy Spokesperson for the Prime Minister's Office, Ms. Lalida Periswiwatana, announced the government's initiative to establish fair trade practices and boost liquidity for SMEs. Deputy Prime Minister and Minister of Commerce, Ms. Supajee Suthamphan, is spearheading efforts to amend credit term regulations, addressing the financial challenges SMEs face due to delayed payments from larger businesses.
The Trade Competition Commission (TCC) has endorsed a draft announcement revising credit term guidelines. The amendment seeks to enforce a payment timeframe of no more than 30 days for agricultural products and a 45-day limit for general trade, manufacturing, and services, unless business reasons justify otherwise.
Ms. Lalida emphasized that the regulation adjustments extend beyond setting day limits. They introduce measures to safeguard SMEs from exploitation. Large buyers must clearly articulate their payment procedures, are forbidden from unjustified payment delays, and cannot alter credit terms or contract conditions without a minimum of 60 days' notice.
Additionally, major buyers are required to provide facts and evidence to the TCC if complaints arise, easing the burden of proof for SMEs. Businesses found guilty of unfair trade practices could face administrative fines of up to 10% of their annual revenue during the year of the offense.
'SMEs should receive payment on time and fairly, rather than shouldering the financial burden for larger enterprises. This regulatory adjustment will clarify the responsibilities of larger businesses, alleviate the burden on smaller entities, and accelerate the circulation of funds back into SME businesses,' stated Ms. Lalida.
The 30 and 45-day credit term frameworks existed in prior regulations. This revision aims to close enforcement loopholes and clarify large businesses' obligations. The draft regulation is still under consideration and will take effect 30 days post-publication in the Royal Gazette.