The Finance Ministry is considering additional tax incentives to encourage people to have more children as Thailand becomes an ageing society, according to a source familiar with the matter.
The Fiscal Policy Office (FPO) has been assigned to study benefits which would be suitable for the government's financial position, said Deputy Finance Minister Wisudhi Srisuphan.
Thailand has earlier been recognised by the World Bank and the International Monetary Fund for its achievements regarding birth control, but it is facing a labour shortage, with local operators needing to hire migrant workers from neighbouring countries.
The government is giving a 600-baht monthly welfare benefit for newborn babies until the age of three, up from 50 baht in the past. The ministry earlier abolished the cap on the child tax credit, which was limited to three children, whether biological or adopted. The allowance per child was also doubled to 30,000 baht.
The FPO is now mulling doubling the child allowance to 60,000 baht for the second child as among the incentives for families to have more children, said the source. In principle, the Finance Ministry aims to encourage people who are physically and financially ready to give birth to more children to boost the population.
Thailand experienced a baby boom during 1963-83, when more than 1 million children were born a year. But the birth rate has now dropped below 800,000 a year, with fertility rate down to 1.6 children per woman from five children in 1974.
According to the Social Development and Human Security Ministry's report, the number of senior citizens aged 60 and older is forecast to reach 13 million -- 20% of the total population -- by 2021. That figure will rise to 19 million or 28% by 2031. In 2015, there were 10.5 million elderly people, accounting for 15.8% of the total population.
Currently, four working-age people must take care of one elderly person and one child. That ratio is estimated to be halved to two working-age people per senior citizen and child.
The demographic shift has compelled the Finance Ministry to seek measures to boost people's savings to allow them to live comfortably in retire and reduce the state's budgetary burden for elderly care.
In 2015, the government set up the long-delayed National Savings Fund, a voluntary pension fund for 25 million informal workers, and allowed provident fund members to make higher contributions than their employers, with a cap of 15% of salary.
The cabinet last year approved a raft of measures to prepare the country for an ageing society: mandatory funds; double corporate tax deduction on expenses incurred by firms hiring ageing workers at a monthly salary of 15,000 baht or less; and reverse mortgages, a home loan that allows the elderly to convert their home equity into cash.
The mandatory provident fund, expected to start in 2018, requires employers and employees each to contribute 3% of the employee's salary for the first three years to the fund before increasing it to 5% in the fourth to sixth years, 7% in the seventh to ninth years and 10% from the 10th year onwards, with base salary capped at 60,000 baht per month.