Expanding Thailand Future Fund (TFF) investment and tax reform are two priority policies that will boost development and help to reduce income inequality, Finance Minister Uttama Savanayana told the Bangkok Post Forum 2019 on Monday.
Outlining urgent tasks, Mr Uttama said that hefty expenditure now on infrastructure development and public welfare will strengthen competitiveness in the long run.
To catch up with advances in technology, investment in digital infrastructure is also necessary but is budget-intensive, he noted, adding that the government cannot shoulder all the costs.
To mobilise more capital for this purpose, the Finance Ministry is set to expand investment by the TFF, one of the government’s chief financial vehicles for infrastructure development in addition to the public-private partnership investment policy, he said.
The fund has so far only invested in the Chalong Rat (Ram Intra-At Narong) and Burapha Withi (Bang Na) expressways.
Mr Uttama said his ministry is coordinating with relevant agencies, including the Transport Ministry, to find more suitable projects to put money into.
The fund is Thailand’s largest initial public offering since 2015, raising 44.7 billion baht during its debut in October last year with retail investors’ combined subscriptions valued at 28.8 billion baht.
The finance minister said tax reform will be another way to raise money to finance infrastructure development and, in the meantime, reduce income inequality.
The Fiscal Policy Office is coordinating with the Revenue Department, the Customs Department and the Excise Department to reform and improve the country’s tax collection system. Many types of e-commerce and online businesses are among the targets for an expansion of the tax base, according to the minister.
Still, there must be a balance between acquiring enough revenue from taxes to take care of investments and adhering to the principles of fiscal discipline, he stressed.
The e-commerce tax bill is being vetted by the Council of State, the government’s legal arm. E-commerce taxes will soon become standard, according to Mr Uttama.
Mr Uttama went on to insist that the strength of the overall economy lies in maintaining the health of the grassroots economy.
He also pledged to maintain government spending on state welfare and continue to empower the elderly to drive the country forward. The fund for the welfare of the elderly now tops 400 billion baht, accounting for 13% of last year’s national budget, he said.
Mr Uttama also rejected as unwarranted concerns raised by investors about the economic direction of the government, which brings 19 parties under the one umbrella.
He said the coalition government will have no problem in ensuring that its policies, including economic direction, move forward.
This government is “special” and will drive the country forward, said Mr Uttama. The parties in the coalition will fine-tune their policies together, he added.
PPRP secretary-general Sontirat Sontijirawong also pledged close collaboration with other parties on economic policy, pointing out that leading the recovery would be a team effort.