'Tax reform key to making Thailand a welfare state'

A REFORMED tax-collection system and strong social-democratic political groups are needed in order to make the country a welfare state, experts said yesterday.

Speaking at the Chulalongkorn University College of Population Studies on the possibility of Thailand becoming a welfare state, experts said the Kingdom had the potential if the taxation system were improved and there were intensive collaboration among social-development groups to call for policy changes.

Pasuk Phongpaichit, a professor at the faculty of economics, Chulalongkorn University, said that by reforming the tax-collection system, the government would have enough money to provide universal fundamental welfare to everyone in the country.

“The World Bank has suggested that if we could improve the taxation system to close all the loopholes, the government could gain up to 5 per cent of gross domestic product, money that could be spent on social welfare,” Pasuk said.

She disclosed that the current budget for the Universal Coverage Healthcare Scheme (UC) was around Bt200 billion per year, or 4.5 per cent of GDP. 

According to research by Somchai Jitsuchon of the Thailand Development Research Institute, if the government improved the UC scheme to the best quality, the budget would increase to Bt400 billion, or 9 per cent of GDP. If the government added all fundamental welfare, the overall budget would be only 12.5 per cent of GDP.

Pasuk said: “The figures show that the budget for good-quality and [comprehensive] welfare would be just a small proportion of the country’s GDP, and if we improved personal-income taxation and increase value-added tax to 10 per cent, we could raise even more money for state welfare. This way, we will have the potential to be a welfare state without collecting more personal income tax.” 

However, Jon Ungpakorn, a representative of the Universal Coverage Healthcare Scheme lovers’ group, said the big challenge was to introduce and implement a universal welfare policy at the governmental level.

“Thailand still lacks a social-democratic party to represent the real voice of the poor. Therefore, we need the public sector to be a spearhead of the political struggle to encourage a universal welfare policy,” Jon said.

“This matter is also a clash between social-democratic ideology, which believes in equality and social security, and neo-liberal ideology, which believes in the wealth of the country through capitalism as the first priory.”

An adviser to the Social Development and Human Security Ministry, Chinchai Cheecharoen, emphasised the need for universal welfare, saying it was the duty of the state to provide fundamental help to everyone no matter how rich or poor they are.

“People usually feel sorry for the poor who don’t have any money to support their life and donate some money to them. 

“This does not solve the problem at its cause. It is the state’s responsibility to ensure every citizen eats well, sleeps well and has rights,” Chinchai said.