Thailand: Scant few eligible for VAT return scheme

A meagre 360,000 of the 11.4 million recipients of the government’s welfare and subsidy scheme for the poor are¬ entitled to value-added tax (VAT) payback in the first month after the tax incentive scheme started last month.¬
The small number was attributed to only a handful of Thong Fah Pracha Rat shops participating in the programme, said Suttirat Rattanachot, director-general of the¬ Comptroller-General’s Department.¬
During Nov 1 to 30, the 360,000 recipients spent 97.4 million baht via welfare smartcards to buy goods at Thong Fah Pracha Rat shops equipped with point-of-sale¬ (POS) terminals, she said. Such transactions generated VAT amounting to 6 million baht, and the buyers will get a VAT refund worth 4.4 million on a pro rata basis.¬
In short, during November, just 3.2% of welfare recipients – 360,000 of 11.4 million card holders – are now eligible for an average of 12.20 baht each from the scheme.¬
Under the six-month VAT return scheme, welfare smartcard holders get 5% VAT back for every purchase they make from November 2018 to April 2019 at shops registered under the¬ VAT system, with 1% redirected to the buyers’ savings accounts or their contribution to the National Savings Fund (NSF). The remaining 1% goes to the government’s coffers.¬
The government caps the VAT return at 500 baht a month throughout the six-month period, with payment scheduled for the middle of every month.¬
The VAT payback scheme is intended to create more disposable income for low-income earners, strengthening their purchasing power.¬
The government gives a monthly living allowance of 200-300 baht to 11.4 million people earning no more than 100,000 baht a year to buy staple goods at Thong Fah¬ Pracha Rat shops. Those who signed up for job training receive an additional living allowance of 100-200 baht a month.¬
Some 5.3 million of 11.4 million recipients of the government’s welfare and subsidy scheme live below the national poverty line, earning less than 30,000 baht a year.¬
The Comptroller-General’s Department is putting money from the VAT payback scheme on the welfare smartcards starting today.¬
Ms Suttirat said only 14% of 30,000 Thong Fah Pracha Rat shops across the country have registered under the VAT system and installed POS machines, resulting in the¬ paltry number of welfare smartcard holders eligible for VAT return.¬
th06For savings accounts allowed to receive 1% return of VAT, she said the department cooperated with the Bank for Agriculture and Agricultural Cooperatives (BAAC) and¬ the Government Savings Bank (GSB) to open special savings accounts for all welfare smartcard holders.¬
Farmers have accounts at BAAC, while non-farm workers have accounts at GSB.¬
Both banks will transfer money to the NSF if the smartcard holders are members of the voluntary pension fund for every 50 baht they get back, Ms Suttirat said.¬