Premier offers tax incentives, says better pay will close income gap
Prime Minister Abhisit Vejjajiva yesterday urged business and industry captains to think "out of the box" and help the government, along with other parts of society, achieve the objectives of national reconciliation following the recent political unrest.
"What do you think of a generous tax break in return for a big raise in the minimum wages?" asked the premier during his speech before the gathering of Board of Trade members in Bangkok.
He said if it was possible to raise the minimum wages significantly, then the low-income people would be able to enjoy a better living standard, thus helping narrow the income gap between the rich and poor.
Abhisit said he had discussed the measure with Finance Minister Korn Chatikavanij, but was not sure how the private sector would react since it would affect their competitiveness considering that wages are a major production cost.
In addition, he said the government was pushing for a land-tax reform to redistribute land ownership and natural resources, with the Cabinet's recent approval to set up a pilot land bank.
This measure will also help narrow the income gap in the long run.
Given that the majority of Thailand's population still worked on agriculture, he urged the private sector to renew their focus on developing businesses and industries in this sector, especially since global demand for food would continue to grow at a high rate due to rising populations.
There are about 10 million workers in the industrial sector, as indicated by the number of social-security members, and that the majority of Thais were still outside this system. In order to boost the purchasing power of these low-income earners, Abhisit suggested that the government could offer income and tax incentives to the private sector if they agreed to back a major restructuring of minimum wages.
High wages would help expand the domestic economy, thanks to better purchasing power of low-income groups, which is needed at a time when the country cannot depend on export demands for long-term growth.