Bring the army of shadows into the light

I would like to take a different stance and ask the government whether it is ready to do something about what it didn’t promise.

Here is the problem: currently, over 60 per cent of the workforce is employed in the informal economy. As such these workers (and their dependants) are not protected by current labour laws. Most also have no access to social security benefits. The high proportion of workers in the informal economy is thus a major factor in inequalities in Thai society.

As many of these informal workers will not benefit from an official minimum wage increase, income inequalities are bound to increase rapidly if no steps are taken to prevent them. So what is the government policy to reduce the informal economy?

There are many steps that can and need to be taken to significantly reduce the size of the informal economy and encourage the migration of informal businesses to the formal sector. Here are a few possibilities:

Reduce administrative and financial barriers for company registration and more importantly for closing a small business.

Adopt more flexible  regulations for start-ups and SMEs.

Improve credit access for start-ups and SMEs.

Reduce, at least temporarily, taxation (VAT, labour tax, social contribution, profit tax) for start-ups and SMEs.

Provide start-ups and SMEs with temporary subsidies to increase wages at the minimum legal level.

Provide start-ups and SMEs with free training to improve workers’ productivity

In the long run, such measures would not only improve workers’ conditions, they would lead to increased tax revenues, improve Thai competitiveness and contribute to reduce inequalities.

Candide

Bangkok