Thailand must raise revenue to boost spending, says World Bank

BLOOMBERG

Thailand must bolster its revenue collection in the long term to meet growing public spending needs stemming from an aging population, according to the World Bank.
Government expenditure on pensions, healthcare, education and climate adaptation will need to increase and this must be achieved without constraining economic growth and keeping public debt under control, the bank said in a report on Thailand’s public revenue and spending assessment.
“Thailand can achieve a more equitable and resilient economy by improving the efficiency of public spending, raising revenues, and implementing policies to support the most vulnerable and respond to climate-related challenges,” Fabrizio Zarcone, World Bank’s Country Manager for Thailand, said in a statement.
The bank recommends a series of progressive tax reforms that could collectively increase revenues by 3.5 percentage points of gross domestic product for Southeast Asia’s second-largest economy. These include raising value-added tax rate and removing exemptions, broadening the personal income tax base and streamlining allowances and deductions, and expanding property tax collection.
Thailand’s public debt has risen to more than 60% from about 40% before the pandemic after the nation ramped up borrowing to tackle Covid outbreak and fund stimulus measures.