Thailand Issues Latest US$1.3 Billion Stimulus Package
On July 16, 2021, Thailand issued its latest stimulus package valued at 42 billion baht (US$1.3 billion), which provides financial assistance to businesses and people located in the 10 provinces impacted by lockdown measures due to the unprecedented increase in COVID-19 cases.Residents living in the 10 provinces (Bangkok, Nakhon Pathom, Nonthaburi, Pathum Thani, Samut Prakan, Samut Sakhon, Narathiwat, Pattani, Yala, and Songkhla) are under strict curfew between 9pm-4am, and all modes of public transport in Thailand have limited their passengers to half capacity — no public transport is available between 9pm-4am.
From the 42 billion baht (US$1.3 billion), 30 billion baht (US$902 million) has been allocated for cash handouts, with the remaining budget being allocated to water and electricity subsidies. Moreover, employers and employees in the following sectors will receive financial aid:
- Hotel and food services;
- Arts, entertainment and recreation;
- Auto retail and repair services;
- Cargo transport;
- Management and support activities;
- Science and academic activities;
- News and information and communication; and
- Other types of service businesses.
The World Bank predicts that Thailand’s economy will expand modestly for 2021 at 2.2 percent, revised from 3.4 percent, as the economy continues to take a heavy toll due to the pandemic. The weaker outlook reflects the likelihood that the flow of international tourists will continue to remain low throughout 2021. Thailand saw 40 million tourists in 2019, contributing US$64 billion to the economy, or roughly 20 percent of GDP.
So far, the Thai government has performed relatively well in the speed and scale of its fiscal response to the pandemic. Preliminary data from the World Bank suggest that some 780,000 people could have fallen into poverty in 2020 if the government had not increased the social assistance.
What financial assistance is available?
Businesses in the stipulated sectors are eligible for a variety of cash handouts and wage subsidies. Employers and employees in these sectors, however, must be registered with the Social Security Scheme (SSS), which was initiated by the Social Security Act 1990 (SSA).
Employees registered under Section 33 of the Social Security Act receive 50 percent of their monthly salary, capped at 7,500 baht (US$225). Thai employers will be given an additional 2,500 baht (US$75) per employee, with a ceiling cap of 10,000 baht (US$300).Employers registered under Section 33 receive 3,000 baht (US$90) as compensation for each employee, capped at 200 employees. Employers and employees not yet registered under the SSA will have to register to receive any financial assistance.
Workers under Section 39 and Section 40 of the SSA will receive cash handouts of 5,000 baht (US$150), while casual workers will need to register themselves under Section 40 of the SSA to be eligible to receive the same amount.
Electricity and water subsidies
Under this latest package, the government offers discounts on water and electricity bills. Households using 150 units of electricity per month will not have to pay for the first 90 units, while those exceeding 150 units per month will have to pay for their actual electricity costs.
Moreover, households using no more than 500 units of electricity per month will pay the same amount as their February bills. Those using more than 500 units and less than 1,000 units will pay the same amount as their February electricity bills plus 50 percent of the units that exceed their February record. This incentive has been made available between July to August 2021.
Small businesses will not have to pay for the first 100 units of electricity while medium and large non-profit-organizations will be exempt from paying the minimum charge until December 2021.
Water bills have been lowered by 10 percent for households and small businesses from August to September 2021.
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