Tax reform key to 'making Thailand a welfare state'

[webfact]

'Tax reform key to making Thailand a welfare state'
Pratch Rujivanarom
The Nation

Experts believe country has potential to cover basic needs at reasonable cost

BANGKOK: -- A REFORMED tax-collection system and strong social-democratic political groups are needed in order to make the country a welfare state, experts said yesterday.

Speaking at the Chulalongkorn University College of Population Studies on the possibility of Thailand becoming a welfare state, experts said the Kingdom had the potential if the taxation system were improved and there were intensive collaboration among social-development groups to call for policy changes.

Pasuk Phongpaichit, a professor at the faculty of economics, Chulalongkorn University, said that by reforming the tax-collection system, the government would have enough money to provide universal fundamental welfare to everyone in the country.

"The World Bank has suggested that if we could improve the taxation system to close all the loopholes, the government could gain up to 5 per cent of gross domestic product, money that could be spent on social welfare," Pasuk said.

She disclosed that the current budget for the Universal Coverage Healthcare Scheme (UC) was around Bt200 billion per year, or 4.5 per cent of GDP.

According to research by Somchai Jitsuchon of the Thailand Development Research Institute, if the government improved the UC scheme to the best quality, the budget would increase to Bt400 billion, or 9 per cent of GDP. If the government added all fundamental welfare, the overall budget would be only 12.5 per cent of GDP.

Pasuk said: "The figures show that the budget for good-quality and [comprehensive] welfare would be just a small proportion of the country's GDP, and if we improved personal-income taxation and increase value-added tax to 10 per cent, we could raise even more money for state welfare. This way, we will have the potential to be a welfare state without collecting more personal income tax."

However, Jon Ungpakorn, a representative of the Universal Coverage Healthcare Scheme lovers' group, said the big challenge was to introduce and implement a universal welfare policy at the governmental level.

"Thailand still lacks a social-democratic party to represent the real voice of the poor. Therefore, we need the public sector to be a spearhead of the political struggle to encourage a universal welfare policy," Jon said.

"This matter is also a clash between social-democratic ideology, which believes in equality and social security, and neo-liberal ideology, which believes in the wealth of the country through capitalism as the first priory."

An adviser to the Social Development and Human Security Ministry, Chinchai Cheecharoen, emphasised the need for universal welfare, saying it was the duty of the state to provide fundamental help to everyone no matter how rich or poor they are.

"People usually feel sorry for the poor who don't have any money to support their life and donate some money to them.

"This does not solve the problem at its cause. It is the state's responsibility to ensure every citizen eats well, sleeps well and has rights," Chinchai said.

Highest tax rates

Welfare states with the highest personal income tax rates compared with Thailand

Finland 62.2%

Sweden 61.4%

Belgium 60.6%

Germany 57%

Japan 50.84%

United Kingdom 50%

Norway 47%

Thailand 37%

Source: Trading Economics

Source: http://www.nationmultimedia.com/national/Tax-reform-key-to-making-Thailand-a-welfare-state-30269436.html

-- The Nation 2015-09-24

[BSJ]

From what I see a lot of the poor are poor because the men waste money on cigarettes, gambling and whisky. So the wife and kids go without. The socialists should be calling for a ban on cigarettes and whisky and getting the police more active in shutting down gambling operations.

[tuanku]

Thailand would benefit from a tax on the proceeds of corruption set at around 110% and levied on all unexplained income and capital.

[Thian]

My Thai friend got a huge taxbill which he could never pay. He found out that another person used his taxnumber illegally.

He went to the tax-office and they couldn't do anything. They told him to talk to that person and make an agreement, which he did. That guy paid him the overcharged tax and made profit out if it because he was a very high income guy so would be charged a higher percentage then my friend.

[MrBrilliant]

To be a 'Welfare state' The rich in power have to 'give' to the poor and not continually fark them over in their squabbles to keep power.

Who writes this <deleted>?

[prakhonchai nick]

From what I see a lot of the poor are poor because the men waste money on cigarettes, gambling and whisky. So the wife and kids go without. The socialists should be calling for a ban on cigarettes and whisky and getting the police more active in shutting down gambling operations.

You missed out the mia nois for Thai men (even the poorest manage a mia noi -or karaoke girl from time to time. And don't forget the women. Much of their money goes on gambling and the incessant gifts and donations to the wats and monks

Many don't deserve welfare or anyones sympathy!

[GAZZPA]

Those tax rates are not correct, they are the "top tier" tax rates for the super rich on huge incomes. In the UK the tax rate for normal people is about 24% I believe. Shoddy reporting, but whats new..

[selftaopath]

From what I see a lot of the poor are poor because the men waste money on cigarettes, gambling and whisky. So the wife and kids go without. The socialists should be calling for a ban on cigarettes and whisky and getting the police more active in shutting down gambling operations.

You missed out the mia nois for Thai men (even the poorest manage a mia noi -or karaoke girl from time to time. And don't forget the women. Much of their money goes on gambling and the incessant gifts and donations to the wats and monks

Many don't deserve welfare or anyones sympathy!

We have asked many able bodied (unemployed) people in our village if they want to work. They don't. Reasons being: it's too hot/dirty/heavy/high/ on and on. They'd rather lie in their hammock and do other "village people" activities.

[Lunchbob]

Great article except for the World Bank reference. The WB is a dated, obscene ex. The member countries do not really participate. WB is a disguised IMF, disguised other......Look at the scam, agenda21 style projects. What malarkey.

[kareona]

From what I see a lot of the poor are poor because the men waste money on cigarettes, gambling and whisky. So the wife and kids go without. The socialists should be calling for a ban on cigarettes and whisky and getting the police more active in shutting down gambling operations.

Brillant! New thinking! Let the poor stop smoking, drinking and gambling. Don't forget whoring though! Don't pity the poor, it's their own fault.

The rich of course can go on with all this expensive vices. Gambling in Macao, Cambodja and Myanmar. No problem. Do not tax the rich! They will have to abandon their vices which is bad for the economy.

Now, if the poor would just stop smoking, drinking and gambling, they will surely become rich in no time! Then, and only then, they can start smoking, drinking and gambling again!

Pattaya is a shining example of compassionate capitalism. Rich people throwing money at poor Isaan girls. That's the way to go. Down with socialism!

[Expat1]

This whole concept is too absurd to even consider worthy of discussion.

[soalbundy]

where is the money going to come from for the submarines if you waste it on the poor

[selftaopath]

Extracting more money from the general population only means an increase in wealth for the corrupt Thai officials, politicians and their clan members.

Do Thais care about other Thais? lol

[Laughing Gravy]

I like the idea in the article. I do however believe that it is unattainable, especially with the mindset of the majourity here. A whole cultural revolution would need to change and at the moment things are going in the opposite direction and getting worse. I wonder if you can get tax relief on the tea money paid to the police?

Seriously just how many people pay taxes. The som tam seller, mama and papa shops, market vendors just to name a few. Even those in corporate jobs I know fiddle the taxes and it is easily done by the sounds of it. Just with that the idea of a welfare state is a dream and nowhere near in the pipeline sadly.

[Expattaff1308]

Those tax rates are not correct, they are the "top tier" tax rates for the super rich on huge incomes. In the UK the tax rate for normal people is about 24% I believe. Shoddy reporting, but whats new..

UK - for your average worker a Tax allowance of 10,600 and then the remainder taxed at 20%

[anon467367354]

just do a fair tax system, if you buy it you pay tax on it. Simple as that and no cheating.

[jaywalker]

My great-uncle in the US would rip up his Social Security checks and burn them when I was a kid.

Cool old guy that would take me into town for an ice cream cone sometimes when I was a very small boy.

He wanted ABSOLUTELY NOTHING from the government.

He wasn't rich by any stretch of the imagination either.

He lived in an old rickety wooden house in the middle of nowhere.

His way of thinking greatly influenced me to this day.

Edited September 24, 2015 by jaywalker

[jaywalker]

From what I see a lot of the poor are poor because the men waste money on cigarettes, gambling and whisky. So the wife and kids go without. The socialists should be calling for a ban on cigarettes and whisky and getting the police more active in shutting down gambling operations.

Spoken like a true socialist.

The country is already a welfare state.

Those in power tend to fare well.

[bkksteve123]

First Thailand needs to deal with and eliminate corruption. Only then can more/reformed tax revenues actually lead to results.

[DrTuner]

Welfare state, as in people living on the dole? Yeah, copy all the <deleted> that's destroying West.

Not surprisingly my country of origin is the #1 in that list and lo and behold what's happening back there: Finland is the worst performing country in the EU block, with a huge leech population. Luckily they outvoted the social democrats, so there is hope.

Edited September 24, 2015 by DrTuner

[jaywalker]

Welfare state, as in people living on the dole? Yeah, copy all the <deleted> that's destroying West.

Not surprisingly my country of origin is the #1 in that list and lo and behold what's happening back there: Finland is the worst performing country in the EU block, with a huge leech population. Luckily they outvoted the social democrats, so there is hope.

But it sounds SO GOOD on paper!!!!

Just ask Greece.

-----------------------

Doug Casey says it's not only silly, it's hilarious.

Said he realized that on the Phil Donahue show when some clown in the audience said "Let the government pay for it!"

Edited September 24, 2015 by jaywalker

[abrahamzvi]

Just one correction that I know of, is the personal income tax rate in Germany. It is a progressive rate with a maximum of 42%, plus 5%, which is to expire in 2018( a loading to support German Unity dating back to 1992) . The 57% rate mentioned dates back to 2001 when the maximum rate was 52% plus the 5% mentioned above.

May I suggest that all the rates mentioned, which may or may not be outdated, be updates, to give the readers the correct information.

[Thai at Heart]

They can only dream until they start taking the taxes they have mandated already.

[brain150]

A welfare state is the dream of every Government ... the more dependend the people are to the welfare

the more power the state gets !

... then, one day, the state has ALL the power and can do what ever it wants.

Because the people who benefit from the welfare will always defend the welfare.

The ones who pay for it are always the same people ... the working middle class that

gets wiped out by the welfare state.

It's just not working like this. Has been tried many times, never worked, never will.

[Thai at Heart]

Those tax rates are not correct, they are the "top tier" tax rates for the super rich on huge incomes. In the UK the tax rate for normal people is about 24% I believe. Shoddy reporting, but whats new..

UK - for your average worker a Tax allowance of 10,600 and then the remainder taxed at 20%

That ignores NI. However the 10,600 allowance is very significant and has taken many out of the system. However, VAT is 20%

[gandalf12]

Those tax rates are not correct, they are the "top tier" tax rates for the super rich on huge incomes. In the UK the tax rate for normal people is about 24% I believe. Shoddy reporting, but whats new..

In the UK the starting tax rate is 20% and going upto 50%. You dont have to be super rich or on a huge income to pay the 50% rate. Most people pay around 33%

Edited September 24, 2015 by gandalf12

[greenchair]

It's all taksin's fault.

[FredNL]

What’s the difference between Thailand and “the Universe”?

Hint: In only one of them there is still hope for intelligent life forms.

Edited September 24, 2015 by FredNL

[theguyfromanotherforum]

This Is true. The tax rates listed for Thailand don't make any sense whatsoever.

[bassman]

Just one correction that I know of, is the personal income tax rate in Germany. It is a progressive rate with a maximum of 42%, plus 5%, which is to expire in 2018( a loading to support German Unity dating back to 1992) . The 57% rate mentioned dates back to 2001 when the maximum rate was 52% plus the 5% mentioned above.

May I suggest that all the rates mentioned, which may or may not be outdated, be updates, to give the readers the correct information.

You forgot the plus 5% to take care of the newly arrived Arabs, to be added soon.