FTI proposes wage-related measures
The Federation of Thai Industries (FTI) has proposed a set of remedial measures the government should launch to mitigate negative impacts from the nationwide minimum wage hike next year.
Payungsak Chartsutipol, chairman of a major business organisation, said that from the measures were drawn up after brainstorming sessions with business operators in all five regions of the Kingdom.
The minimum wage will be raised to Bt300 a day on January 1.
Of the four measures, a compensation fund should be set up.
To cope with cash expenses, the government should also cut in employers and employees' contribution to Social Security Fund to 2.5 per cent of salary base. Operators should be allowed to deduct taxable income twice of the actual amount of higher expenses. SME operators should be promised immediate VAT refund for three years. The government should also cut the household and municipal tax by half for three years.
To improve productivity through innovation, the government should set up a matching fund.
On tax issues, witholding taxes for SMEs should be cut from 3 per cent to 0.1 per cent.
The government should also ensure that the measures are designed to fit SMEs in different zones. The FTI classified 29 provinces as the most needy for those help. Then, labour-intensive industries like shoes and garments should be the first to receive the government assistance.
"The higher wage is the government's election campaign and it might not care about the private sector's demands. But we insist that the government needs to come up with remedial measures, as many operators particularly hundreds of thousand SMEs will be affected by the wage hike. The public and private sectors need to sort out mutually-agreed solutions," Payungsak said.
The measures would be submitted to Prime Minister Yingluck Shinawatra.
In a related development, the Cabinet today approved the nationwide wage hike. It also acknowledged the remedial measures proposed by the Labour Ministry.
The Labour Ministry has so far come up with six key measures and 27 others also put in effect, either immediately or after the January 1 launch date, said deputy government spokesman Chalitrat Chandrubeksa.
The measures, aimed at reducing employers' cost, are reduction in employers' contribution to the social security scheme, a reduction in corporate tax, and a fund to offset different wage rates on the provincial basis.
On developing workers' skills, a tax deduction in threefold rates for employers whose workers undergo or complete government-funded skill enhancement programmes, a soft loan for skill trainings.
On financial assistance, separate soft loans to boost liquidty, expansion of employment, increasing sales volume and increasing productivity. On tax incentives, a contingency tax exemption, purchase of new machinery to increase production volume and deduction in machinery's depreciation.
On revenue boosting through government contracts, an increase in budget on government-held seminars, and an increase in channels of sales for SME business owners. On reducing costs of living, a credit coupon for employees, a loan scheme for victims of loan sharks, and a reduction in value added tax.
