Plastic money set to become a way of life

Growing payment systems via the Internet will bring more convenience to people. When we pay for food or mass-transit tickets, we just put a card on a device and money for the transaction will be deducted from our account. No more need to find and wait for change. 

The government has just woken up to evaluate what it had not done and what needs to be done next to create a national e-Payment system. Meanwhile, the private sector has take long strides using the Internet network. Business models have been given a face-lift. Online shopping platforms are gaining popularity among people worldwide, including Thais, in response to changes in their lifestyles. So, e-Payment is much more important than before in a bid to serve the increasing number of e-business transactions. Many private banks have developed their own online payment applications for smartphones for both corporate and individual clients.

According to a PayPal survey, current online transactions in Thailand were valued at Bt14.7 billion or Bt13,181 per person. Of that, 71 per cent were from middle-income earners. Most of the transactions were executed through bank online payments. 

Under the Prayut-led government, Deputy Prime Minister Somkid Jatusripitak, who oversees economic affairs, was appointed chairman of a committee carrying out the National e-Payment Master Plan as soon as the plan was approved in principle by the Cabinet last month. 

The plan aims to develop the country’s one-stop e-Payment services, which will include: payment infrastructure development; increased efficiency in the e-Tax System; social welfare registration; financial inclusion; and a cashless society. 

The National e-Payment Master Plan is part of Bank of Thailand’s third-stage financial system development plan for the period 2016-20 in accordance with the government policy to push for the “digital economy”. 

At the first stage, we should see the development of the e-Payment system in the form of “Any ID” – any ID of users such as mobile phone number, bank account or ID number that ties in with a card – in the next six months of this year, as per the Finance Ministry’s schedule. However, it is not clear which kind of card – debit or credit – it will be. 

The e-Payment system will benefit the private sector, especially small and medium enterprises (SMEs), and the government sector. In fact, the national e-Payment system should benefit the government sector the most, as it can have data of both individuals and businesses in a bid to outline key policies on income distribution and taxation. 

The government, however, can use the e-Payment system to help uncover flaws in income distribution via taxing policies and measures in the past as well as pulling all targeted businesses and individuals into the tax system.

Many governments failed to expand the tax collection base of both corporates and individuals. Out of a total population of 66 million as of fiscal 2012, only 3.2 million persons pay personal income tax, with total receipts of Bt197.88 billion. Those who earn more than Bt4 million a year are subjected to a 35-per-cent tax, but they actually paid only 27.82 per cent on average after availing themselves of the full benefits from tax deduction measures. 

Among corporates, 2.7 million are SMEs of whom 400,000 are registered with the Business Development Department and some 200,000 are now active. However, only 80,000 of them are taxpayers. 

Beyond convenience, we will be challenged for “accuracy” in the data collecting system. We can use e-Invoicing, e-Receipt, and e-Tax system, which means those in the system will find it hard to avoid tax payments. Also, corruption would be automatically reduced if the government adopts e-Payment in its procurement system. 

Not only will the government target for efficient tax collection materialise, but it will also help income distribution to the grassroots in a form of populist policy through taxation measures. Those who are classified as negative income earners may be given some kind of aid. Meanwhile, the rich, especially those who own businesses, as well as celebrities, superstars and singers, may be not allowed many tax shields. 

After all, it would be great if the government started the e-Payment system by means of paying back the excess annual personal income taxes directly to the taxpayers via their personal bank accounts instead of using bank cheques. This will help the government save money, which was collected from taxpayers.