Govt may eye negative income tax system to improve welfare
NIT could replace state welfare system to provide financial help to low-income people
Deputy Finance Minister Julapun Amornvivat said on Tuesday that the government may enforce a negative income tax (NIT) system in a few years to improve the state welfare system.
He said the NIT may replace the state welfare system to provide financial help to low-income people and may even be used in lieu of the current monthly allowance for the elderly.
“I think the NIT may be used in one to three years in accordance with the government’s policies that have been delivered to Parliament,” Julapun said.
Julapun said the NIT concept was studied by the Fiscal Policy Office (FPO) several years ago, and the Revenue Department has also discussed it.
The past study, Julapun said, focused on providing a kind of compensation to people after they had paid taxes for a certain length of time. But now, the concept has changed to focus more on improving the state welfare system, Julapun said.
He said he would soon hold a meeting with representatives of the FPO and Revenue Department to follow up on past studies on the NIT.
“We will find out how far the studies have gone so that we don’t have to start from zero,” Julapun said.
He said the Finance Ministry would study the NIT with the FPO and Revenue Department and the results would be sent to the Cabinet for approval later.
He said the NIT concept would bring all people into the tax system. The government would draw a line on income, and people whose income is lower than the line would receive state welfare and financial help.
He said those who have paid tax up to a certain point might receive a larger amount of financial help.
The deputy finance minister said the government may amend the Revenue Act so that all people would be integrated into the tax system. Currently, only people with revenue over 120,000 baht per year are required to submit a tax form to the Revenue Department.
If the NIT system works effectively, the government may abolish the state welfare-card system, Julapun added.
He said the NIT system may allow the government to overhaul all the welfare projects, including the monthly allowance for the elderly, as the government might not have enough money to cover all aged people in the long run.
