Ministry working on third phase of co-payment subsidy
The Finance Ministry is in the process of designing the third phase of the co-payment subsidy scheme to maintain economic recovery momentum.
The ministry is deliberating on the number of eligible recipients and monetary giveaway for each individual in the third phase, said Krisada Chinavicharana, permanent secretary for finance.
Although details of the deliberations have not been finalised, the main difference between the first two phases and the third phase is the latter would permit eligible registrants to use the financial assistance for public services, such as payment for public transport, said Mr Krisada.
"The main reason we have to implement the third-phase co-payment scheme is we want to see continued momentum in Thailand's economic recovery," he said.
"The scheme has a multiplier effect that disburses to every segment, especially retail shops that have registered under the scheme, nearly 2 million shops. It also encourages people by paying for half of purchased goods and services, leading to more consumer spending."
The ministry is deliberating whether funding for the third-phase co-payment scheme will come from the 1-trillion-baht emergency loan decree, said Mr Krisada.
Of the 1-trillion-baht emergency loan decree, the portion of 600 billion allocated to limit public suffering is almost depleted.
The 400 billion baht allotted for economic rehabilitation has around 200 billion left, he said.
Some 45 billion baht remains for public use from the 600-billion portion.
The remaining 200 billion baht for economic rehabilitation could be allocated for programmes designed to ease people's plight from the pandemic, said Mr Krisada.
Under the co-payment scheme, the government pays for 50% of food, drink and general goods purchases of up to 150 baht per person per day, capped at 3,500 baht per person for a specified duration.
The objective is to stimulate consumer spending after sentiment was gutted by the pandemic.
The first phase of the scheme started on Oct 23, 2020 and ended on Dec 31, 2020.
The government allocated 30 billion baht for the first phase, covering 10 million people, with each receiving a 3,000-baht money transfer.
The second phase, which runs between Jan 1 and March 31, 2021, covers an additional 5 million people, with the amount of subsidies raised to 3,500 baht per person.
The government subsidy conditions stipulate spending by registrants must be made within 14 days from the day of registration.
Regarding the proposal requesting the Finance Ministry lower the 20% corporate income tax, Mr Krisada said the ministry could consider a tax reduction if Thailand wants to compete with other countries to attract foreign direct investments.
If the ministry were to lower the corporate income tax, this would be implemented through a tax package policy, meaning there would be lower taxes and tax policies devised to compensate for losses in public revenue, he said.