The government's value-added tax (VAT) payback scheme for welfare smart cardholders is getting a lukewarm response, as only a handful of merchants have participated in the programme.
Although there are 30,647 Thong Fah Pracha Rat shops across the country, a mere 4,247 have registered under the VAT system, said Yanee Sangsrichun, acting adviser of fiscal and financial system development at the Comptroller-General's Department.
She said 940 merchants have signed up for the VAT system after the government offered a subsidy for point-of-sale (POS) terminals, missing the target of 2,319, as operators have fretted about the tax burden.
The law requires registration under the VAT system for operators with annual sales of at least 1.8 million baht, while those earning below the threshold can register in the tax system on a voluntary basis.
The cabinet earlier approved VAT payback for welfare recipients. The six-month scheme, capped at 500 baht a month, started in November.
Based on the 7% VAT rate, welfare smartcard holders will get 5% VAT back for every purchase they make from November 2018 to April 2019 at shops registered under the VAT system, with 1% redirected to the National Savings Fund, the voluntary pension fund for self-employed workers.
The remaining 1% goes to the government's coffers.
The VAT payback scheme is intended to create more disposable income for low-income earners while strengthening their purchasing power.
The government is giving a monthly living allowance of 200-300 baht to 11.1 million people earning no more than 100,000 baht a year to buy staple goods at Thong Fah Pracha Rat shops.
Those who signed up for job training receive an additional living allowance of 100-200 baht a month.
Some 5.3 million out of 11.4 million recipients of the government's welfare and subsidy scheme are living below the national poverty line, earning less than 30,000 baht a year.
