NLA passes bill committing sin taxes to old-age pensions

NLA passes bill committing sin taxes to old-age pensions

The National Legislative Assembly on Thursday passed legislation to require producers of alcoholic beverages and tobacco pay an earmarked tax to finance pension payments for poor, elderly people.

The bill, which passed its second and third readings, requires that the producers pay the Elderly Fund the equivalent of 2% of the alcohol and cigarette excise taxes they pay each year. The fund may receive up to 4 billion baht yearly, with the excess going to state coffers.

The proceeds will finance the living allowance scheme for the elderly.

The bill, which passed its second and third readings, requires the allocation of 2% of liquor and cigarette taxes, up to 4 billion baht yearly, to the living allowance scheme for the elderly.

Adm Polawat Sirodom, head of the NLA committee that scrutinised the legislation, told the meeting the allowance would be paid to poor, elderly people registered under the government's poverty assistance scheme.

To be eligible they would have to be at least 60 years old and earn no more than 100,000 baht a year, he said.

A national committee on the elderly will set other criteria for receiving the assistance, and the amount of the allowance, he said.

NLA members spoke in favour of using "sin taxes" to help the old and poor, and called for the criteria to receive the allowance to be clearly set down.

The NLA passed the bill with 181 votes in favour and six abstentions.

This is the fourth earmarked tax charged on the producers of alcohol and tobacco, in addition to the excise tax which goes to state coffers.

They already pay the equivalent of 2% of the excise tax they pay each year to the Thai Health Promotion Foundation, 1.5% to state-owned TV operator Thai PBS and 2% to the National Sports Development Fund. The latter two may receive up to 2 billion baht each year, with the excess going to state coffers.

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