Thailand’s tax system needs an overhaul as the nation grapples with an ageing population, Deputy Finance Minister Julapun Amornvivat announced recently. With a growing number of senior citizens, the government faces mounting financial pressure to sustain welfare programs.
Julapun revealed that the Finance Ministry is considering the introduction of a negative income tax (NIT) system to support individuals with incomes below a government-set threshold. The idea isn’t to reduce public welfare spending but to ensure people can maintain their quality of life.
The ageing trend is undeniable. Thailand crossed the threshold into an “ageing society” in 2005, when citizens aged 60 and above made up more than 10% of the population. By 2023, that figure reached 20%, with approximately 13 million seniors, according to the Department of Older Persons. The NIT system is still in its preliminary phase, with studies suggesting implementation could take 1 to
Julapun emphasized the need for updated studies as the global framework for NIT has evolved. The current focus is on aiding low-income individuals who don’t typically pay taxes. He stated that the government will need to redefine income thresholds and possibly amend existing tax laws, such as the requirement for individuals earning 120,000 baht annually to file a tax return.
Collaborative studies between the Fiscal Policy Office (FPO) and Revenue Department are expected to provide further clarity, which will then be forwarded to the cabinet for consideration.
The proposed system could replace current welfare mechanisms like the state welfare card program, but officials must evaluate whether these changes would create redundancies in government aid.