Thailand reviews taxes and launches digital wallet to tackle income disparity
The Finance Ministry of Thailand is set to review the new land and building tax and the inheritance tax and launch the digital wallet following an order from Prime Minister Srettha Thavisin. The move aims to mitigate income disparity in the nation. PM Srettha, who also holds the Finance Minister post, gave the directive subsequent to the appointment of a new director-general of the Revenue Department.
It was noted that the inheritance tax only rakes in an annual total of around 200 million baht, a figure PM Srettha deemed as minimal and symbolic. The 61 year old prime minister acknowledged potential dissatisfaction from the public due to the recurrent discussion of inheritance tax during political shifts in the country. Nonetheless, he emphasised that despite the source of income, be it through inheritance or otherwise, tax payment remains a requirement. This is in line with the ongoing effort to address income disparity.
In a related development, the Revenue Department has modified its notification on tax imposition on certain foreign-sourced income. This change will be effective from January 1, 2024.
Moreover, the government’s plan to impose a 20-baht train fare within three months is considered ambitious and complex. It involves a 60 billion baht compensation to the private sector, seamless connectivity, and a single-ticket system. PM Srettha also mentioned the increase of minimum daily wages as another method to decrease the cost of living. This is expected to be announced in November and take effect from January 1, 2024.
The Thai government will utilise the Pao Tang app by Krungthai Bank for its digital wallet project. The app will incorporate blockchain technology, according to the PM. The new prime minister confirmed that the government has a sufficient budget of 560 billion baht for this project. More detailed information about the project will be disclosed within the next ten days.
The digital wallet scheme aims to stimulate local economies and prevent excessive income concentration in urban areas. The digital currency will be applicable for the purchase of various daily necessities, the list of which is yet to be finalised. The budget required for the one-time cash handout may vary, depending on the number of eligible citizens.
PM Srettha is confident that if the scheme can be executed by February 1, 2024, employment will rise as businesses will hasten to produce goods and services to support the government’s measures. This will stimulate the economy before the implementation of these measures.
Foreign direct investment promotion is another critical issue as it significantly affects GDP growth in the long and short term. The PM plans to draw investment from some of the world’s largest corporations during his upcoming visit to the United States for the UN General Assembly. Talks will revolve around Thailand’s competitiveness, investment opportunities, and free-trade agreements.
According to PM Srettha, Thailand’s strengths lie in its strategic location, robust infrastructure, strong financial condition, world-class healthcare, and a large number of international schools and colleges. He added that Thailand is a global kitchen, ensuring food security amid worldwide food shortages, and is a major food exporter, including halal food to Middle Eastern and African nations, reported Bangkok Post.
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