ASEAN KEY DESTINATIONS
Thai economists call for tax code reform
Sakon Varanyuwatana, an economics lecturer at Thammasat University, said the government should make an effort to collect more tax revenue based on the capacity of taxpayers.
"In terms of fiscal strength, there's no reason to worry. Cash reserves amount to more than 400 billion baht, and collection exceeds the target for the previous fiscal years But we found there to be a wide gap between collection capacity and the ability to pay," he said.
Mr. Sakon said the government should set aside an inadequate amount of money to bolster the domestic economy. Tax reforms should also aim at narrowing inequalities, as low-income earners have greater difficulty accessing financial services.
"With the expected slower economic growth next year, the public sector will have more constraints on tax collection," he added.
The Thai Finance Ministry earlier announced a tax reform plan for early 2011. Deputy Prime Minister Trairong Suwannakhiri told the forum that insufficient revenue to meet increasing calls for social welfare will be among the main difficulties in the future. "The demand for expenditure is high, but income trends don't match it," he said.
"Ours has become an ageing society, which is defined as having 10 percent of the population aged over 60, a threshold that Thailand passed in 2005. And we will enter this more fully in 2025, when the number of people above 60 will be 20 percent of the population."
Patamawadee Suzuki, the dean of Thammasat's economics faculty, said the country's public investment budget has decreased to 22 percent of the economy's size from 38 percent before 1997. Asean countries' average public investment is 28 percent of gross domestic product.
The economy also suffers a shortage of unskilled labour, while the quality of skilled labour falls short of market demand, she said. Farmers are heavily burdened with debt, while new technological breakthroughs to increase yields are not likely to be forthcoming.
"We have a strong macroeconomic policy but weak microeconomic policies. And the public sector will see many constraints next year," she said.
Yuth Vorachattarn, the chairman of Kim Eng Securities, said low wages have played a role in political conflicts in recent years. The minimum wage, adjusted for inflation, declined from 172 baht in 1998 to 159 last year.
Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below