Thailand faces fiscal crisis within a decade warning

Thailand could face a Greece-style fiscal collapse within 10 years unless it urgently reforms public spending, welfare and tax collection, a Chulalongkorn University political scientist has warned.

Weerasak Kureath, a lecturer in the university's Department of Public Administration, said the fiscal system can still carry its present burden. But he told a university seminar that without reform, "the system will collapse within 10 years, similar to Greece".

A fiscal breakdown could affect welfare schemes and other state-funded services, he said, potentially leaving the government without money even for fuel for rubbish trucks.

Debt pressure is increasing

Thailand's fiscal position has been tightening for a long time, Mr Weerasak said, although the government became concerned only around two years ago when the burden approached a level authorities could no longer sustain.

Public debt stood at 67.5% of GDP in July, against a statutory ceiling of 70%. Mr Weerasak expects debt to rise over the next two years, with the government likely to lift the ceiling to 80% of GDP and eventually to 100% within five or six years.

Those projections do not include the possibility of an economic crisis, he said. Debt held within state-owned financial institutions is also excluded from the government's public-debt calculation under Section 28 of the State Fiscal and Financial Discipline Act.

Delaying reform could leave Thailand needing International Monetary Fund assistance again, Mr Weerasak said. Once the country reached that point, restoring the economy could take a decade.

Calls to cut overlap and tighten scrutiny

Mr Weerasak said the public sector should be reformed to reduce spending, including by reviewing agencies with overlapping duties. He cited Vietnam, which reduced civil servant numbers by 30-40% through public-sector reforms.

Thailand has numerous bodies with overlapping national-security responsibilities, including the Internal Security Operations Command, National Intelligence Agency and Southern Border Provinces Administrative Centre, he noted.

He also called for stronger checks between the executive and legislative branches. The executive has considerable authority over public spending, including tax-relief measures approved through cabinet, while off-budget funds can be used independently, he said, citing the Thai-AI Passport project funded by the Ministry of Digital Economy and Society.

Tax exemptions granted to Board of Investment-promoted projects exceed 200 billion baht annually, although analyses suggest the economic returns may not match lost government revenue.

Broader tax base before any VAT rise

Thailand has more than 40 million workers but only around five million personal income-tax payers, Mr Weerasak said. About 20 million agricultural workers are exempt from personal income tax, and he said the government should reconsider which farmers qualify, including owners of large land holdings.

Online businesses have expanded rapidly while tax collection has struggled to keep up. Some businesses maintain multiple accounts to evade tax, he said, adding that technology could improve monitoring and collection.

Mr Weerasak said Thailand should broaden its tax base before raising VAT. The statutory VAT ceiling is 10%, below rates of up to 20% in many European countries, and each one-percentage-point increase could generate up to 100 billion baht in additional revenue.

He also questioned broad welfare distribution. The Prayut government issued welfare cards to about 14 million people, while the National Economic and Social Development Council estimated Thailand had 4.8 million poor people. Finance Minister Ekniti Nitithanprapas recently sought to reduce card recipients to nine million, but faced opposition.

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20 September 2026