The Revenue Department has proposed doubling the deduction for any expenditures made to renovate nurseries to support the business and boost Thailand's fertility rate.
The Social Development and Human Security Ministry is in the process of drafting a law to support nurseries, with one measure initiated by the Revenue Department, said a source at the Finance Ministry.
The measure will allow nurseries to deduct expenditures on construction and renovations by double the current rate, capped at 1 million baht, said the source.
For instance, if a nursery spends 1 million baht on construction or renovations, it can receive a deduction of 2 million.
If expenditures total 10 million baht, then the incurred cost can be deducted via a regular tax calculation. The 1 million amount will be added to total expenditure, with deductions being calculated from 11 million, not 10 million baht.
Only nurseries registered as legal entities can receive the tax privilege, excluding home-based nurseries.
The Revenue Department is expected to roll out the tax incentive in 2018 in an effort to boost the fertility rate in Thailand, said the source.
The department allows a current tax deduction for child care of up to 30,000 baht per child, without a limit on the number of children.
Each parent is allowed to receive a tax deduction of 30,000 baht per child.
The tax deduction for childcare being drafted by the department is still being considered by the Finance Ministry.
The draft would allow for a tax deduction of 30,000 baht for the first child, with the rate increasing to 60,000 for the second child.
The Finance Ministry's Fiscal Policy Office found that Thailand was becoming an ageing society in 2007, with over 10% of the population identified as elderly.
That percentage rose to 14.2% in 2015, while it is expected that Thailand will become an aged society by 2025, when the percentage of the population deemed elderly is forecast to rise to 21.2%.
Thailand's population rose by around 300,000, or 0.6% year-on-year, in 2006 to 62.5 million from 62.2 million in 2005, according to the Institute for Population and Social Research (IPSR) at Mahidol University.
Thailand's population is expected to continue rising, albeit at a slow pace.
By the year 2022, the fertility rate is expected to be on the same level as the mortality rate, resulting in zero population growth, said an IPSR study.
The study concluded it is possible population growth will enter negative territory after 2022.