Bangkok: The Treasury Department is contemplating a significant revision to its “tax reduction” strategies in an effort to rejuvenate the Thai economy by addressing four identified economic traps.
According to Thai News Agency, Deputy Prime Minister and Minister of Finance, Ekniti Nitithanpraphas, shared insights during a keynote address at the “Thailand Economic Outlook 2026: Out of the Trap” event organized by Krungthep Turakij. He revealed that during the upcoming Government Fiscal Policy Committee meeting, the Ministry of Finance will explore potential adjustments to tax deduction measures. These measures, which currently allow individuals and corporations to claim various expenses as tax deductions, require further refinement and clearer guidelines. The Ministry is considering setting a definitive cap on annual tax deductions. Additionally, the Stock Exchange of Thailand has proposed the establishment of an Individual Savings Account system, aimed at providing investors with more flexible investment choices while reducing redundancy.
The government’s economic team is working under the constraint of a four-month management period, focusing on achieving a “Quick Big Win” through short-term economic stimulation. The Deputy Prime Minister outlined four primary economic traps that Thailand must overcome. Once considered Asia’s fifth tiger, Thailand is now likened to a bedridden patient. The traps include the investment trap, where reliance on traditional industries necessitates a shift toward modern sectors like AI, data centers, electric vehicles, automation, and green technologies. Measures to attract investments include streamlining the investment process through the Board of Investment and simplifying licensing for utilities and foreign expertise.
The second trap is the labor skills gap, with a significant portion of the population lacking market-relevant skills. To address this, the government plans to invest 10 billion baht in a competitiveness enhancement fund, aiming to train 100,000 workers for future industries within the first four months.
The third challenge is the technological trap, where private companies struggle to keep pace with rapid technological advancements. The government plans to offer a 50% grant for research and development to small and large businesses, along with incentives for large companies hiring from SMEs. This initiative is part of a broader SME support package to be rolled out over 120 days.
Finally, the issue of household debt and fiscal discipline poses a significant challenge, with public debt constituting 64% of GDP. Small businesses face the burden of principal and interest payments, which could shrink purchasing power and adversely affect the economy. The government is preparing measures to tackle this debt issue and is collaborating with various entities to encourage increased bank lending.