Thailand
Thailand: Stimulus package to fuel spending
The cabinet on Tuesday approved fresh stimulus packages dubbed New Year’s presents to stimulate spending during the festive season.
The packages include a tax deduction for individual taxpayers of up to 30,000 baht when purchasing goods or services, an extension of the existing co-payment subsidy scheme and a cut in property transfer and mortgage fees.
According to government spokesman Thanakorn Wangboonkongchana, the tax deduction incentive for individual taxpayers will be offered for purchases between Jan 1 and Feb 15, applicable for the 2022 tax year.
Mr Thanakorn said the scheme is projected to inject 42 billion baht into the country’s economy, forgoing roughly 6.2 billion baht worth of state tax revenue.
The scheme is estimated to help generate 0.12 percentage points of economic growth, he said.
Books and items under the One Tambon, One Product scheme are included in the tax deduction scheme, but alcohol, cigarettes, lottery tickets, petrol, accommodation and air tickets are excluded.
According to Mr Thanakorn, the cabinet also approved in principle the fourth phase of the “Khon La Khrueng” co-payment subsidy scheme after phase 3 expires at the end of this year.
The fourth phase is scheduled for March and April next year.
The Finance Ministry is expected to announce later details of the new phase of the co-payment scheme.
The cabinet also extended the property tax incentives until Dec 31, 2022 to drive housing market growth.
The property incentives include a cut of the property transfer and mortgage fees from 2% and 1% to 0.01%, respectively, for units priced 3 million baht or less.
These incentives were scheduled to expire at the end of this year.
The new incentives become effective once published in the Royal Gazette.
The government is projected to lose 4.94 billion baht in revenue from the extended property incentives, said Mr Thanakorn.
In addition, the cabinet approved an extension of excise tax reductions for jet fuel until June 30, 2022, in a move to ease the burden of airlines, which have been hit hard by Covid-19 outbreaks. Border restrictions have crippled tourism and wiped out most air travel.
The cabinet approved lowering the excise tax on jet fuel to 20 satang per litre from 4.726 baht in February last year as part of urgent aid measures for domestic airline operators during the pandemic.
The reduction expired on Sept 30 last year, but was extended until Dec 31 this year as the impact of the pandemic persisted for the airline industry.
The government is estimated to lose 860 million baht in revenue from the excise tax reduction on jet fuel, he said.
Another cabinet move was exempting licence fees to sell liquor, cigarettes and cards during 2022.
Finance Minister Arkhom Termpittayapaisith said the New Year gift measures would ensure economic growth momentum continues into 2022.
The ministry predicted an economic expansion of 1% this year and 4% in 2022.
Mr Arkhom said the government would continue to keep its guard high against the Omicron coronavirus variant.
Source: https://www.bangkokpost.com/business/2235759/stimulus-package-to-fuel-spending