B50bn fund for low income approved

The cabinet approved a Finance Ministry proposal yesterday to establish a 50-billionbaht “Pracha Rat Fund for Low-Income Earners” to reduce income disparity over the long run.

The fund will be financed by the government’s fiscal 2018 budget. It will focus on people who earn less than 100,000 baht a year and register with state agencies by May 15 this year.

Nathporn Chatusripitak, an adviser to Prime Minister’s Minister Suvit Maesincee, said the fund will serve five purposes: upgrading people’s quality of life, developing occupational skills, easing the shortterm impact from natural disasters, providing residences and farmland, and providing social protection and health.

He said the government will issue a bill later to govern the fund and work out the guidelines to help low-income earners in the future.

Mr Nathporn said 11 million low-income earners have registered with state agencies and the figure is expected to reach 14 million by May 15, the deadline for registration.

There were 8.3 million low-income earners registered last year, but only 7.7 million were eligible to receive the government’s aid measures.

He said the government would later issue smart cards for low-income earners to receive direct assistance.

In a related development, Kobsak Phutrakul, assistant minister to the Prime Minister’s Office, said the cabinet also approved tax incentives for companies that group together in clusters to invest in research and development (R&D) in five business areas.

Companies that group together will be eligible to claim deductions for R&D expenses of 300%, up from 200%, if they invest more in five business areas: food, agriculture and biotechnology; public health, healthcare and biomedical technology; robotics and smart devices; digital, Internet of Things and artificial intelligence; and creative economy, culture and lifestyle.

The incentives will be offered from 2017 to 2019. Similar incentives on offer during 2016-2020 to individual companies remain effective.

Mr Kobsak said the government’s tax incentives could help stimulate expenditure in R&D to 1% of the country’s GDP in five years, or about 130 billion baht. R&D spending in 2015 accounted for only 0.62% of GDP. Of that 30% or 25.2 billion baht was from the government sector, with 70% from the private sector.

The government expects R&D expenditure to increase to 0.75% of the GDP in 2016 and 0.8% in 2017.