Pachara Naripthaphan points out that budget reform is not just about reducing personnel expenses; the root causes must be addressed. He proposes allocating resources to fairly meet the needs of the country's five foundational areas.
3 Jul 2026 GMT+7 Mr. Pachara Naripthaphan Pachara Naripthaphan, a member of the Securities and Exchange Commission (SEC), commented on the annual budget bill’s first reading, saying it is a routine and critical practice for both permanent and executive branches to propose budget frameworks to improve and address economic problems. The budget serves as a tool influencing GDP indicators directly and indirectly, through government spending, private sector activities, investments, and exports.
He noted that recent discussions have focused blame on public personnel expenses, with calls to reduce numbers and adjust civil servant benefits. While this is a valid consideration for reform, focusing solely on cutting personnel costs to increase investment spending is misguided. Such an approach treats symptoms rather than root causes, which lie in revenue collection issues stemming from an abnormally narrow tax base.
He urged reconsideration before concluding that public personnel expenses are excessively high, emphasizing the need to first examine the state’s revenue side. Academic articles from the parliamentary budget office reveal a clear structural problem: Thailand has about 40.53 million workers, but only 11.88 million file tax returns. After deductions, only 4.73 million individuals—or approximately 11.67% of the workforce—actually pay personal income tax.
Moreover, the tax burden is concentrated: those earning over 1 million baht annually, about 400,000 people or 8.44% of taxpayers, pay 72.8% of all personal income tax revenue. Meanwhile, nearly 21 million informal workers remain almost entirely outside the tax base, consistent with Thailand’s large informal economy, which accounts for 42.5% of GDP.
This evidence shows that Thailand’s structural revenue problem is not excessively low tax rates but an overly narrow tax base. A good tax system is broad and fair, not narrow with high rates. Everyone must pay taxes at a rate commensurate with their ability, Pachara said.
The narrow tax base also leads to further inequity, as the government relies heavily on regressive indirect taxes. Tax data from 2024 shows Thailand depends on indirect taxes for 50.28% of state revenue, while personal income tax accounts for only 12.58%. This means lower-income individuals bear a disproportionate tax burden through consumption. Public debt has also risen to 65.71% of GDP, nearing the fiscal discipline ceiling of 70%.
Similarly, a parliamentary budget office report forecasting state revenue over five years from May 2026 expects total revenue collection to rise from 3.507 trillion baht in fiscal year 2026 to 3.845 trillion baht in 2030. Although nominal figures increase, revenue as a share of GDP declines continuously from 18.11% in 2026 to 16.97% in 2030. Net revenue after allocations similarly falls from 15.02% to 14.16% in the same period.
The report concludes this reflects GDP growth outpacing tax revenue growth, implying the government's fiscal capacity is declining in the medium term. Revenue collection grows on average only about 2.32% annually. The core issue is that if the economy grows but the state cannot collect revenue accordingly, the leakage lies in the tax collection structure. As GDP rises, revenue sources must also rise, requiring fair and efficient tax collection.
All these points show that while personnel expenses are indeed a large budget item needing cuts or adjustments, any reductions must first consider the root causes and the potential to manage them. If feasible, these should be addressed before focusing solely on expenditure allocation.
Beyond revenue, budget utilization must be considered. The latest IMD World Competitiveness Ranking 2026 places Thailand’s overall competitiveness at 26th, up from 30th, and education ranking improves to 52nd globally. While seemingly positive, detailed indicators are concerning: Thai workers’ foreign language skills fell five places, and high-level workforce skills dropped eight places.
Thailand excels in easily measurable areas like literacy rates, which rose nine places, and per-student spending, which improved by five ranks. However, in skills truly demanded by the labor market—English proficiency and advanced skills—the country has regressed. This clearly shows educational investments are still misaligned with actual needs.
These structural problems persist, and the budget must support or stimulate systemic changes. Additionally, budget priorities should include building a just and secure justice system, a robust public health system, effective transportation, and social systems that strengthen family resilience. This is the challenge for budget allocation arising from revenue generation, Pachara added.
His proposal for revenue and budget reform includes three tax system approaches: First, expanding the taxpayer base via digital systems, making all economic transactions through e-Payment automatically taxable without self-reporting. This would gradually bring nearly 21 million informal economy workers into the tax base without direct compulsion.
Second, maintaining strict tax equity by prohibiting case-by-case tax exemptions for special interests, as such exemptions erode the tax base from within. Third, restructuring taxes to reduce inequality, preserving progressive personal income tax brackets, while linking corporate tax reductions to genuine investment conditions rather than permanent unconditional cuts.
Ultimately, the reform must lay foundations in five areas: justice and security, public health, education, transportation, and social systems that support strong families. Currently, Thailand lacks strength in all these areas simultaneously, evidenced by near-tripled discrimination in justice per the WJP index last year, an eight-rank drop in high-level workforce skills, and household debt soaring to 86.7% of GDP.
Therefore, today’s budget reform challenge is to adjust revenue methods, expand the tax base, and ultimately allocate resources fairly to support these five foundational sectors. This is the approach that must be questioned and answered for the country going forward.