The Revenue Department plans to increase the tax allowance for children and the taxpayer's personal allowance starting in the 2017 taxable year to address the issue of the ageing society, says director-general Prasong Poonthanes.
Thailand has one of the most rapidly ageing populations in the world. By 2030 an estimated 25% of the population or 17 million people will be over 60, up from 13% or 8 million today. Its birth rate has been a low 1.4 per 1,000 women over the past five years, according to World Bank data.
Thailand's Finance Ministry has looked at tax measures to deal with the issue.
Mr Prasong said the department will extend the tax allowance to an unlimited number of children from the current maximum of three in a bid to encourage Thai families to have more children.
The child allowance is 15,000 baht each for minors or children under 25 years and studying at a valid educational institution.
Additionally, the department is considering raising the ceiling of personal allowance for individual taxpayers, currently 40% of total annual income but not exceeding 60,000 baht per person per year.
"We are studying how to extend the ceiling with the least negative impact on our tax receipts," Mr Prasong said.
"The amendments are meant to make the law more suitable for the current situation and to serve changing trends, especially the ageing society. The extension of the tax allowance ceiling and allowance items is essential to suit the current circumstances."
The ministry is conducting a study of the pros and cons of different models, especially the effect on tax revenue. Each model under study would cause a drop in tax revenue of about 10 billion baht a year.
Apart from the child and personal perks, the ministry plans to expand other allowances to tackle the ageing issue. But the allowance for long-term funds (LTFs), due to expire in the 2016 taxable year, may or may not be renewed.
Officials are studying several models such as keeping the allowance strictly for retirement mutual funds (RMFs) or keeping both funds' allowance but adjusting the ceiling.
"The policy is that for any allowance that can encourage Thai people to have more children, we are ready to amend the rules to support the policy," Mr Prasong said.
LTFs and RMFs, though, are meant to encourage savings for retirement.
There are currently more than 20 items of tax allowance such as for couples, for parenting, for mortgages and retirement savings.
On an update of the negative income tax bill, Mr Prasong said all income earners could be required to submit their personal tax filings, including those who earn less than 50,000 baht a year and are eligible for a personal exemption.