InfoQuest (March 5, 2020) -- Finance Minister Uttama Savanayana revealed that at the economic cabinet meeting on March 6, his ministry will present the first economic stimulus package to help cushion fallout brought by the novel coronavirus (Covid-19) outbreak. The whole package is worth more than 100 billion baht. It includes providing subsidies to low-income people, wage earners, freelancers and farmers through PromptPay accounts. The exact amount has yet to be determined, but estimated to be between 1,000-2,000 baht per head. The subsidies may be paid once or on a monthly basis, but the ministry needs to make sure that results will be delivered within three to four months.
"People need to sign up for the program, and they can withdraw the cash immediately after they receive the remittance. It is very easy. More than 14 million people will benefit from this round of cash handouts. This package is independent of the "Taste, Shop, Spend" scheme and the national welfare card policy. Holders of welfare cards can also receive subsidies this time if they meet the standards, and the fourth phase of the "Taste, Shop, Spend" scheme will have to take a back seat," said Mr. Uttama.
Relief measures will also be taken for the stock market affected by the Covid-19 outbreak and the sluggish economy. The Finance Ministry has discussed with the Fiscal Policy Office (FPO), the Revenue Department and the Securities Exchange of Thailand (SET) on the replacement of the long-term equity funds (LTFs) with the Super Savings Fund (SSF), with an aim to shore up the equity market where SET Index has fallen sharply.
A review is under way as to whether the investment ceiling will be raised to 500,000 baht and the holding period will reach up to seven accounting periods as before. However, this is a temporary measure.
In addition, tax measures will be introduced to help businesses continue to hire workers, including a tax credit of twice the salary of employees. Meanwhile, The Tax Department will issue a notice to slash the withholding tax to increase the liquidity, and a foundation will be set up to provide financial support to ensure that companies can pay compensation to employees during the suspension of work.
In addition, relief measures aiming to assist ordinary enterprises among small and medium-sized enterprises (SMEs) and tourism operators will be adopted, including providing soft loans for them as operation capital. At the same time, the Bank of Thailand (BOT) has cut the reserve requirement ratio of commercial banks to enable them to provide more loans.
Mr. Uttama said the decision to call an emergency meeting made by the Federal Reserve to cut the interest rate to 0.50 percent was the right one because the world economy still brim with uncertainties. The BOT is closely monitoring the situation, and it will ultimately be up to the BOT to decide whether to follow suit. The BOT and the Ministry of Finance have been in close communications for some time.
Mr. Uttama said his ministry also invited the BOT to join the discussions concerning this package, aiming to inform the bank of the specific measures to be implemented and urge it to mull future monetary measures before the the Monetary Policy Committee (MPC) meeting scheduled to be held on March 25.
"I have stressed my stance to the permanent secretary of our ministry that all measures must be implemented immediately after they are approved by the economic cabinet and by next week's cabinet meeting. These measures will be valid for three to four months and will be implemented until June to July. As it is not known when the epidemic will end, we call this aid package as the first measure, which means we are ready to issue the second and third measure if the economy does not improve," said Mr. Uttama.
Source: InfoQuest, by Thapa/ Rachada / Sasithorn, translated by Xinhua Silk Road.
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