Workfare Implementation Requires Tax Filing
PUBLISHED : 9 Sep 2024 at 08:36
In a recent discussion, Finance Permanent Secretary Lavaron Sangsnit expressed strong support for the introduction of a negative income tax (NIT) scheme, aimed at offering welfare payments to low-income workers, also referred to as workfare. This initiative would activate when an individual’s income falls below a designated threshold.
Mr. Lavaron emphasized that the NIT concept encourages employment by providing welfare payments to individuals earning below a certain level. Under this scheme, the government would subsidize the income to bridge the gap between an individual’s earnings and the minimum threshold.
For those unemployed, the financial assistance provided would likely be lower than what is offered to employed individuals, he added.
“The NIT concept is designed as workfare, which necessitates individuals to work in order to qualify for enhanced government benefits,” stated Mr. Lavaron.
He believes that the implementation of the NIT scheme could lead to reduced welfare expenses for the state and streamline the existing framework of approximately 20 welfare programs, including the state welfare card, which entails annual costs of up to 50 billion baht.
As part of the NIT scheme, individuals looking to receive workfare would be required to submit their annual personal income tax forms to the Revenue Department for income verification as part of the eligibility criteria for government support.
As recipients’ incomes improve, the government incentivizes their progress through additional support, a process referred to as “phase in.” When an individual’s earnings hit a specified level, the state assistance amount stabilizes; once income exceeds the minimum threshold, government support ceases.
This proposal, which originated from the Fiscal Policy Office nearly a decade ago, shifts the paradigm of social assistance, mandating work as a condition for receiving state benefits.
Mr. Lavaron pointed out the rising challenges of government expenditure, which has grown continuously. In fiscal 2023, expenditures on “hard to reduce” items reached 2.13 trillion baht, representing 67.2% of the government’s overall budget, an increase from 65.8% in fiscal 2022. This spike is largely driven by debt repayment obligations, as well as increased welfare expenses related to public personnel and the elderly.
Furthermore, he noted a marginal decrease in the portion of the budget allocated to salaries, contributions, and compensation for public personnel, dropping from 26.2% in fiscal 2022 to 25.7% in 2023.
