A new OECD report outlines policy options to gradually expand social protection coverage in Thailand.
The report, Financing Social Protection through General Tax Revenues, Social Security Contributions and Formalisation in Thailand, emphasises that more spending, including on social protection, requires expanding fiscal space, particularly through increased revenue from general taxes and social security contributions.
Only one in three people received a cash benefit under social assistance programmes in 2023, with spending in this area falling below 0.8% of GDP. The report identifies tax reform options to mobilise additional revenues to finance the country’s priority spending reforms, including its social protection system.
The report underscores the importance of boosting the tax-to-GDP ratio, which stood at 17.1% in 2023, with social security contributions accounting for just 0.9% of GDP. Policy options to strengthen domestic resource mobilisation include reforms to the value added tax, corporate and personal income taxes, and social security contributions.
The report highlights the need for sustained economic growth that translates into higher tax revenue is critical. It also examines policy options to expand social insurance coverage, including the introduction of a presumptive tax regime. Over the medium to long term, domestic revenue mobilisation and formalisation efforts will be increasingly important as social protection financing needs are expected to rise significantly due to rapid population ageing.
For more information and to access the report, visit: https://www.oecd.org/en/publications/financing-social-protection-through-general-tax-revenues-social-security-contributions-and-formalisation-in-thailand_b5cc1a43-en.html
Queries should be directed to the OECD Centre for Tax Policy and Administration Communications Office.
