Thailand’s Cabinet Approves Minimum Wage Hike and Tax Breaks to Stimulate Economy

On Tuesday, Thailand’s cabinet approved a series of measures to stimulate economic growth, including an increase in the minimum wage, tax breaks to encourage spending, and the second phase of the government’s handout scheme.

Prime Minister Paetongtarn Shinawatra announced that the government aims to raise the daily minimum wage to 400 baht ($11.72) nationwide, effective January 1. However, the wage committee has decided on a 2.9% increase, resulting in a new minimum wage range of 337 baht to 400 baht ($9.90 to $11.70), depending on the region. The highest wage will apply only to select provinces, including Phuket, Chachoengsao, Chon Buri, Rayong, and the holiday island of Samui.

In addition to the wage increase, the government is introducing tax breaks to boost consumption, although specific details were not disclosed. Deputy Finance Minister Julapun Amornvivat revealed that taxpayers could receive a deduction of up to 50,000 baht based on proven spending, excluding domestic travel. These tax incentives will be available from January 16 to February 28.

Furthermore, the cabinet approved the second phase of its signature handout scheme, allocating 40 billion baht to support four million elderly citizens, who are expected to receive payments by January. The first phase of the scheme, launched in September, has already provided 10,000 baht each to approximately 14.5 million people, with plans to extend the handouts to 45 million individuals.

Paetongtarn expressed optimism for economic growth exceeding 3% in the coming year, as the government implements these measures to bolster the economy.

($1 = 34.1300 baht)