The Finance Ministry will subsidise point-of-sale (POS) terminals at 3,000 Thong Fah Pracha Rat shops that have already registered under the value-added tax (VAT) system as part of efforts to encourage more small shops to enter the tax system.
The imminent VAT payback plan for welfare recipients is also expected to tempt small shops to enter the VAT system and smartcard holders to become National Savings Fund (NSF) members, said Suttirat Rattanachot, director-general of the Comptroller-General's Department.
Each POS terminal costs about 30,000 baht, she said.
There are some 35,000 Thong Fah Pracha Rat shops nationwide, of which 3,800 already signed up as operators under the VAT system. The law requires registration under the VAT system for operators with annual sales of at least 1.8 million baht, while those earning below the threshold can register in the tax system on a voluntary basis.
The cabinet earlier this week approved a VAT payback for welfare recipients. The six-month scheme, capped at 500 baht a month, will start in November.
Based on the current 7% VAT rate, welfare smartcard holders will 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 NSF, the voluntary pension fund for self-employed workers. The remaining 1% goes to the government's coffers.
The VAT return scheme is intended to create more disposable income for 11.4 million recipients of the government's welfare and subsidy scheme while strengthening their purchasing power.
Finance permanent secretary Prasong Poontaneat recently estimated that the VAT payback scheme would cost the government 3-5 billion baht. The state will allocate money from the 40-billion-baht Pracha Rat Fund to finance the VAT payback scheme.
The 1% allocated as savings for smartcard holders who are NSF members is meant to entice low-income earners to apply for the pension fund, Ms Suttirat said.
Of the 11.4 million recipients of the government's welfare scheme, 6 million are qualified to be NSF members.
Ms Suttirat said the Finance Ministry will discuss with commercial banks the opening of savings accounts with fee waivers for those who do not qualify as NSF members, putting the 1% VAT earned from purchases into the accounts.