By Achara Deboonme
“Why didn’t they buy BTS cards and top up the amount in the cards?” he asked.
Here is my reply: “Some people may be unable to afford to leave their extra money in the cards.”
He shook his head, saying “But with the cards, they don’t have to wait. It will save time.”
Well, some people may find it wiser to buy a ticket, which costs less than Bt70 for a ride from one end to the other. If they obtain a card for 5 rides, that means they have to put Bt350 in the card. Using it once means some Bt280 is missing from their pockets.
Many car owners may have a similar thinking. At present, the number of cars that use Easy Pass for the express lanes on tollways is about 1 million. That number is small for the expressway that caters service for over 1.1 million trips per day, or over 30 million trips per month.
Among the 1 million users, taxi drivers are not among them. Years after the pass card was launched, a taxi driver asked me about the card, while we were caught in traffic and when few cars were seen on the express lanes. He wanted to know how to obtain it. But once he knew that he had to pay cash for the card, he no longer wanted it. The card could help him save time, but for a driver who earns hundreds in net daily income, it was unwise to put the hundreds into the card. The driver then got stuck in the long queue which lowered the chance to make more money.
It is the same in the case of grocery purchases. Some items are cheaper if you buy them in a big pack. For example, some toothpaste brands are sold in a bundle. Buying two means a discount, sometimes 30 per cent. Similarly, a roll of toilet paper costs Bt8-12, but a pack of six or more offers attractive discounts. Unfortunately, not all shoppers can afford to be attracted to discounts. It explains a lot why big supermarkets or hypermarkets need huge parking space: most of their customers own vehicles, big enough for the loading of big packs. It is why 7-Eleven convenience stores can emerge anywhere, as it is where shoppers buy small items in small quantity. If you cook every day, it saves money if you buy a big bottle of sauce. Street food vendors would save more if able to buy a dozen.
It is also the same when it comes to tax deductions. There is a long list of items that allow individual taxpayers to deduct their taxable income, but how many can benefit from that?
For now, there are 16 items that can reduce the taxable income.
Salary workers may find investment in long-term equity funds (LTFs) or retirement management funds (RMFs) the most attractive. The maximum deduction amount must not exceed 15 per cent of taxable income or Bt500,000 maximum.
If you earn Bt3 million a year and parts of it are subjected to the 20 per cent tax rate, in the year you will have to pay taxes worth Bt900,000. But you are allowed to invest Bt450,000 in LTFs and that would reduce the tax amount to Bt765,000. You save more than Bt100,000 in the year, just by investing in LTFs. More deductions are promised if can afford life insurance premiums up to Bt100,000 a year. In the past year, the bills paid during a domestic trip worth up to Bt15,000 can also be used for the deduction.
With that saving, you have cash in bank accounts, allowing you to invest in any good investment options. The stock market is not a good option now, but it was in 2014. In the year when the index gained over 15 per cent, if you had cash in hands, you could grow it immensely. It is the same way when you can buy groceries or other things that can help you save money.
There is little doubt that you will be the envy of those who earn Bt300,000 a year, who are subjected to the 5 per cent tax rate. The saved tax amount will be much less and when good investment opportunities land at their doors, they have much less chance to jump into the bandwagon.
Well, these people are still much better off than those earning minimum wage, who have little chance of saving at all.
In a way, it is like the rich can only get richer, while the poor will never catch up.
According to the World Bank, income inequality and lack of equal opportunities have persisted in Thailand. Income inequality, as measured by the Gini coefficient, has fallen in recent years, but stays consistently high above 0.45, it said.
A Gini coefficient of zero expresses perfect equality, while a Gini coefficient of one (or 100 per cent) expresses maximal inequality. In this case, it means many in Thailand are left out when others enjoyed from economic growth in the past years.
Many of these people just get by with daily life. To them, making ends meet is difficult. It is why free public buses remain necessary, even if this means they have to wait for a long time. For them, saving money seems more urgent than saving time.