FPO mulls big tax cut for hiring seniors

The Fiscal Policy Office (FPO) is studying an additional measure to deal with the ageing population by allowing companies to triple corporate tax deductions on expenses incurred from hiring senior workers who are otherwise unable to live comfortably after retirement.

Companies will be able to make the triple tax deduction on expenses incurred from the salary of senior workers whose qualifications meet the Finance Ministry’s requirement if the study is approved, said director-general of the FPO Krisada Chinavicharana.

The cabinet last year approved a package, including allowing companies that hire ageing people with a salary of 15,000 baht a month or less, to be eligible for a double corporate tax deduction on expenses incurred. The package also includes reverse mortgages and a mandatory provident fund to help retired elderly afford living costs and to strengthen the retirement safety net.

There are about 10 million people aged 60 or older nationwide, 7 million of whom receive a monthly living allowance of 600900 baht each from the government, he said, adding that the government spends 70 billion baht annually to cover their living expenses.

If any senior citizens with enough funds to live a comfortable retired life wish to abstain from receiving a living allowance, the Finance Ministry has mulled awarding them honourable medals, said Mr Krisada.

All senior citizens are entitled to the step-up living allowance, with 600 baht monthly paid to those aged 60-69, 700 baht to those aged 70-79, 800 baht to those aged 80-89, and 1,000 baht to those 90 and older.

Seeking measures to care for the growing number of senior citizens is among the government’s priorities. In 2015, it successfully pushed for the establishment of the National Savings Fund, a voluntary retirement safety net for 25 million nonformal workers.

Meanwhile, the long-awaited mandatory provident fund is set to be enforced in 2018. The law requires firms with 100 workers or more to match employees’ contributions to the fund within the first four years of its enforcement.