Ministries to consider aid plan for SMEs
The Finance and Labour ministries yesterday agreed to jointly consider the Joint Private Committee's new proposal to help small and medium-sized enterprises (SMEs) cope with the new Bt300 minimum wage.
The measures are initially expected to cost the government Bt50 billion over three years.
The old proposal had 27 assistance measures, but they were cut to 23 in the new proposal.
The ministries will consider four key measures: reducing the monthly contribution to the Social Security Fund to 2 per cent for both the employer and employee for three years; chopping the tax deduction at source from 3 per cent to 1.5 per cent for both big corporations and SMEs; partially subsidising the SMEs in 70 provinces for three years through 2017 at the rates of 75 per cent, 50 per cent and 25 per cent of the wage difference; and cutting the service charge for hotel rooms from Bt80 to Bt40 per year, which is directly collected under the Interior Ministry’s law.
Earlier, both sides were far apart on the proposal. For instance, the government rejected the measure to reduce the monthly social security contribution to 2.5 per cent from the current 4 per cent since it had already been dropped from 5 per cent to aid flood-hit companies. Furthermore, the Cabinet had already approved the extension of the 4-per-cent rate for another year.
After the meeting with the two ministries, Vallop Vitanakorn, head of the wage-hike solution panel of the FTI, stressed that those measures were focused on SMEs. Only the tax deduction at source included other corporations. However, the government already planned to reduce that tax.
Yesterday’s meeting also considered the conditions and methods to implement the measures. It was agreed that only SMEs registered with the Social Security Office would be eligible.
If the two ministries accept the committee’s new proposal, it will be forwarded to the Joint Public Private Committee and then to the Cabinet for final approval.
The proposal is designed to create a win-win situation for SMEs and the government in the long run. For instance, the Finance Ministry will enjoy tax collections starting in the second year of the programme when the number of registered SMEs increases as well as the tax base. The Labour Ministry will also draw more SMEs into its social security scheme.
