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Thailand’s Finance Ministry Spearheading an Effort to Cancel Old-Age Allowances

The Finance Ministry also is spearheading an effort to cancel old-age allowances to many citizens over 60, in order to "save for the state" an estimated 10 billion baht per year.

The Finance Ministry also is spearheading an effort to cancel old-age allowances to many citizens over 60, in order to “save for the state” an estimated 10 billion baht per year.

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BANGKOK – Thailand’s Deputy Prime Minister Somkid Jatusripitak has ordered the Finance Ministry to study tax incentives to spur the private sector to hire more elderly employees as part of a plan to address the problem of an ageing society, which is straining state coffers.

Mr Somkid said Monday that he had discussed the issue with Finance Minister Apisak Tantivorawong, policies to support older workers could include tax incentives for companies to hire them and an extension of the retirement age.

The government has sought to extend the retirement age of government officials from 60 to 65 years of age.

He has also requested that the private sector lend a hand to help deal with the issue, saying that the ageing society will become a major problem in the future

He has also requested that the private sector lend a hand to help deal with the issue, saying that the ageing society will become a major problem in the future

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The Finance Ministry also is spearheading an effort to cancel old-age allowances to many citizens over 60,┬áin order to “save for the state” an estimated 10 billion baht per year.

“This policy is aimed at helping the elderly to retain their incomes and reduce the burden on the government for assisting retirees, as they [currently] have no chance of being employed anywhere even though they are still capable of working efficiently,” said Mr Somkid told the Bangkok Post.

“In the future there will be policies for supporting the elderly to be able to keep earning incomes and not just wait for their 500 baht a month pensions from the government. It also has a social aspect as they will be able to stay [productive] in society as well,” he added.

(The old-age allowances actually range from 600 to 1,000 baht depending on the age of the recipient.)

Workers repair clothes at a seniors' work center in Tokyo. Japan's rapidly aging population

Workers repair clothes at a seniors’ work center in Tokyo. Japan’s rapidly aging population

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Mr Somkid said the government also plans to tackle issues related to an ageing society by using Japan’s policies as a model.

The policies include designing special housing loan schemes for the elderly like reverse mortgages, which are still under consideration by the Finance Ministry and state-owned GH Bank.

He has also requested that the private sector lend a hand to help deal with the issue, saying that the ageing society will become a major problem in the future and will have effects across the board.

Mr Somkid has also asked big companies such as Unilever to help support small and medium-sized businesses (SMEs), especially startups, which will be the new engine for the Thai economy.

He said many countries such as Korea had started to rely more on the economic activities of startups to be the main drivers of economic growth.

“For Japan, whose economy relies heavily on big corporations, when these companies start to slow down, the whole economy slows down as well,” Mr Somkid said.

“So the private sector has to help these SMEs grow because when these SMEs are strong, the economy will also show strong growth as well.”

Meanwhile, Mr Somkid said that even though the economy is starting to recover, the government will not increase the value-added tax (VAT) rate since it currently is not an appropriate time for such a move.

The VAT stands at 7%, a rate which is expected to expire at the end of September.

He added that a suggestion from the University of the Thai Chamber of Commerce (UTCC) for the government to set up a 50 billion baht emergency fund to stimulate the economy to help deal with possible after-effects from Brexit would not be necessary, as its impact on Thailand would be minimal.

By Patipat Janthong

Short URL: http://www.chiangraitimes.com/?p=40271

Posted by on Jul 5 2016. Filed under Economy & Business, Regional News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.
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