The private sector is calling on the government to help by paying 50 per cent of employees’ salaries, especially for those who have been forced by the Covid-19 outbreak to take leave without pay, and is also asking it to cut down the wages it has to pay to daily wage earners from eight hours to no less than four hours a day. There are concerns that the outbreak will last for another two to three months, which may result in up to 10 million people losing their jobs.
Suphan Mongkolsuthee, chairman of the board of directors of the Federation of Thai Industries (FTI), said the Joint Standing Committee on Commerce Industry and Banking (JSCCIB) has decided to encourage the Thai Credit Guarantee Corporation (TCG) to provide 80 per cent credit guarantee for loans taken by SMEs up from the current 40 per cent, reduce employers’ social security contribution from 4 per cent to 1 per cent and cut down on electricity bills by 5 per cent.
In addition, he said, the Social Security Office should help businesses affected by Covid-19 by helping to pay 50 per cent of the employees’ wages calculated from a base salary of no more than Bt15,000 or no more than Bt7,500 per employee. The employer will pay another 25 per cent of the wages and deduct this expense to cut down on corporate income tax.
There are some 18 million people who come under the social security system, of them about 10 million are severely affected by the pandemic and should receive aid, so entrepreneurs can continue employing them.
“If the government does not help these operators, a lot of businesses will be closed leaving more people unemployed. If these businesses can maintain their workforce, then they will not have to start all over again once the situation improves,” Suphan said.
As for helping SMEs, the government should improve the procurement regulations for government agencies to use locally manufactured products as well as speed up payments to private contractors working on government projects to boost their liquidity. The government should also waive corporate taxes for SMEs for two years, because most small businesses have almost no revenue and some are even making losses. The government should also cut down on the mortgage fees and land transfers to 0.01 per cent.
In order to further reduce costs for entrepreneurs, the government should get rid of red tape and allow requests to be made online, as it will greatly reduce the operators’ expenses and cut down on travel during the pandemic.
Kalin Sarasin, chairman of the Thai Chamber of Commerce, said that according to private estimates, at least 7 million people are expected to be unemployed in the next two months. If the Covid-19 situation continues for another two to three months, the unemployment numbers may rise to 10 million, including unverified labourers. Therefore, he said, the government should speed up the disbursement of loans to entrepreneurs and grant income tax benefits for businesses that have accumulated losses for the past five to seven years.
The authorities should also automatically renew work visas for foreigners working in Thailand at least until May 31.
As for helping the private sector’s help with the fight against Covid-19, the government should completely waive taxes so businesses have more money in hand to fight the contagion.
Published : April 13, 2020
By : The Nation