Thailand boosts unemployment benefits and cuts taxes to help citizens faced with Covid costs

Thai social security contributions are to be lowered from 5 to 3 per cent for three months from January following approval by the cabinet Tuesday.

The unemployment benefit for those let go due to the impacts of the Covid-19 pandemic was increased from 50 per cent to 70 per cent of wages, for up to 200 days, an increase from the previous limit of 150 days.

Employees who resign will also receive 45 per cent of wages for up to 90 days. Anyone forced out of work because of the partial lockdown will be granted 50 per cent of wages for up to 90 days.

The measures apply to all employers and employees contributing to the national social security, who account for 30 per cent of the country’s workforce of 38.7 million.

The cabinet also approved an extension of a 90-per-cent cut on the tax on land and buildings, which expired in December.

An annual land tax was introduced last year on plots of commercial land worth more than 5 million baht, at 0.01 for commercial owners, 0.02 percent for homeowners except first-time buyers, and 0.3 percent for vacant plots.

The tax was immediately reduced by a factor of 10 on implementation. The government said Tuesday it would hold the revised rate, but did not say for how long.

Liquidity

State-owned banks, including the Government Savings Bank and the Bank for Agriculture and Agricultural Cooperatives, are extending soft-loan measures for individual debtors and small or medium business (SMEs) until June, said Finance Minister Arkhom Termpittayapaisith.

There were 18.9 billion baht left over from the previous round of measures that expired in December, he said.

The Thai Credit Guarantee Corporation has a leftover budget of 170 billion baht that it is to use for loan guarantees for SMEs looking to borrow from banks.

The Finance Ministry is working with the Bank of Thailand to ease regulations and improve access to the central bank’s soft loans available since last year, the finance minister said.

The Government Savings Bank has come out with a reverse mortgage loan, especially for businesses in urgent need of liquidity, he added.

Arkhom also said all seven state-owned banks will also continue to offer interest rate cuts and loan payment holidays for individual debtors and SMEs, including the extension of principle and interest-rate payments, with the rate and period specified by each bank.

He added that the government still has a budget of 268 billion baht while the central bank still has over 370 billion baht in their soft-loan budget.

This means that the government can still provide another 638 billion baht of liquidity to support the economy during the current crisis.

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