In spite of lowering factory output, exports and depressed public sentiment, the Thai state’s revenue for October and November grew by 4.6%, well ahead of projections for the year. This was driven by a massive 36.8% boost in excise taxes with lower income tax and customs revenue.
The Thai government has extended the cut-off point from 60 to 65 years for self-employed people to sign up for the country’s social security programme as the latest figures show exports of industrial products down by 6.4% and factory output down by over 7%.
Thailand’s factory output contracted by just over 7% in November driven by a slowdown in exports of industrial products which make up 80% of Thailand’s total export consignments around the world.
Exports of such products were down 6.4% on a year by year basis. The figures are not a surprise. They show the continuation of the same pattern and effects of the spiralling high Thai baht and the disruption in world trade caused by the US-China trade war.
Even as a deal between the two superpowers has been announced, it is still only a tentative first step at best towards a full understanding and it will take some time for things to get back to anything like the normality enjoyed before the trade war if at all.
It is expected, nonetheless, that next year will see some improvement in world trade conditions.
Higher tax receipts for October and November
In spite of this uncertainty and malaise in the economy, the Thai government has reported buoyant tax receipts for the first two months of the 2020 fiscal year commencing in October.
Receipts were up 4.6% for the period coming in at ฿413.6 billion. This was 1.6% ahead of the government’s own target.
On closer examination, it can be seen that this income boost was driven by indirect taxes with excise receipts reported by the government growing by a gigantic 36.8% for the period coming in at ฿107.4 billion.
Income taxes down by 8.1%
The state’s income tax receipts from the Revenue Department told a different story. Receipts were down significantly by 8.1% coming in at ฿252.4 billion.
Custom Department receipts showed a 12.1% contraction drawing in ฿17.4 billion while remittances from state owned enterprises were ฿67.9 billion, up by over 12%.
The data also shows that the Thai government’s disbursements for the period were nearly ฿550 billion. Treasury reserves stood at ฿340.8 billion
Christmas Eve cabinet decision to extend social security to the self-employed aged from 60 to 65
On Christmas Eve, the Thai government following a cabinet meeting announced an amendment to its social security provisions extending the age by which freelance self-employed individuals can join the country’s social security scheme under Article 40 of the Social Security Act.
The Thai deputy government spokeswoman Ratchada Dhanadirek explained that the move was being made as part of the government strategy to address the country’s ageing population and workforce.
63,000 people impacted by the move
There are reported to be 4.36 million Thais aged between 60 and 65. Out of this, there are 63,000 still actively participating in the Thai economy working on a self employed basis in agriculture, transport and as street or market vendors.
This group of people will now have the opportunity to join the scheme at different levels of entry ranging from ฿70 per month to ฿100 per month to ฿300 per month. All such contributions are matched by the government at a rate of ฿30, ฿50 and ฿100.
The scheme offers participants up to 30 days paid income at ฿300 per day if seriously ill as well as payments in the event of physical disability and allowances to cover funeral costs in the event of death.
Part of the Thai government’s 20-year strategy to address social inequality and its effects
Ms Ratchada said the move was also part of a 20-year government strategy to address social inequality.
‘The Ministry of Labour has proposed that the age qualification under article 40 be amended from ‘not less than 15 years old and not over 60 years old’ to ‘not less than 15 years old and not over 65 years old,’ she explained. ‘The reason for this change is that we are seeing increasing numbers of older persons who are still capable of working as a self-employed or freelance.’
Last week, the Governor of the Bank of Thailand Veerathai Santiprabhob underlined his concern at a possible decline in the numbers participating in the Thai workforce as it struggles against economic headwinds and the rising effects of oncoming demographics challenge.