PUBLISHED : 16 Mar 2024 at 16:46
A report on a progressive state pension system by the Committee on Social Welfare recently received House approval with an execution plan expected in the 2030 fiscal year.
This new edition of the pension plan is reported to be an improvement from one made by the former set of House committees in 2021 and proposed during the government of Gen Prayut Chan-o-cha.
The plan looks to use the progressive rate, which promises to pay every elderly person 3,000 baht per month, instead of the current staircase rate in which the rate starts at 600 baht a month and rises by 100 baht every 10 years.
The study cites Chulalongkorn University’s Faculty of Economics research on the feasibility of establishing a National Basic Pension Fund, that a better pension system will lead to a better economy.
The study suggested the government view the payment as a pension, not a donation, and that the pension was a basic right that citizens should receive. It should give the elderly enough money to pay for their daily lives.
Regarding the budget burden, the study suggested further research on efficiency and coverage based on the principle of public economics.
The government should focus on how to avoid redundancy in the system, such as monthly pensions for civil sector retirees, the study said.
Because a large amount of money is needed for the pension system, the government needs to look for sources of funding, the study said.
Should the tax system be managed effectively, up to 40 billion baht annually can be allocated to pay for pensions.
Some duty fee collections were suggested to fund the pension, such as a sin tax, fuel tax, motor-vehicle tax, visa fee, and media licence fee.
Pension spending will increase rapidly over the next two decades, most of it from the government pension.
It should be an opportunity to fix structural problems by reforming the economy to be fairer and create a welfare system to make everyone’s quality of life better.
The government should shape budget priorities by reducing unnecessary spending and abolishing special privileges and tax deductions for billionaires and large capital groups, including the Board of Investment (BOI), and a capital gains tax.
A less discriminatory method for income tax collection, a value-added tax increase, and a so-called tax revolution were also included in the study.
“As the government has to source for more pension funds, this is a good opportunity for the country to improve its infrastructure in a way that provides fairness while constructing welfare systems that encourage life quality improvement,” said the study.