Finance Minister Apisak Tantivorawong said the new tax structure (see table) would come into force for the 2017 tax year.

The new rates could cost the country Bt32 billion per year in lost tax revenue, but this could be offset by higher value-added-tax revenue from increased consumer spending, he said.

Apisak believes the new tax structure will boost people’s disposable income and encourage spending.

Among highlights of the new tax structure is an increase in the personal allowance to Bt60,000 a year, from the current Bt30,000.

The maximum child allowance will also be doubled to Bt30,000 per child, from Bt15,000 currently. The current limit on the number of children that are eligible – three – has also been scrapped.

Taxable income bands are also being widened in some brackets.

Personal income tax accounts for 17 per cent of overall tax revenue, while corporate income tax accounts for 32 per cent.

Under the current personal income tax structure, taxable income of up to Bt150,000 per year is exempt from tax; while Bt150,001 to Bt300,000 is subject to 5-per-cent tax; Bt300,001 to Bt500,000 is taxed at 10 per cent; Bt500,001 to Bt750,000 is taxed at 15 per cent; Bt750,001 to Bt1 million is taxed at 20 per cent; Bt1,000,001 to Bt2 million is taxed at 25 per cent; Bt2,000,001 to Bt4 million is taxed at 30 per cent; and more than Bt4 million is taxed at 35 per cent.

The Cabinet also approved the Finance Ministry’s proposed Baan Pracha Rath affordable-housing scheme on plots owned by the Treasury Department. The programme aims to serve state officials on low incomes and other low-income earners.

Pilot projects will be built at two locations in Phaya Thai in Bangkok, two in Phetchaburi, and one each in Chiang Mai and Chiang Rai.

The projects in Bangkok will only serve state officials, who can rent the units for five years.

The projects in the provinces will serve state officials and other low-income people, who can rent the units for 30 years.

The government will invite private property developers to build the projects, which will provide housing for people with a minimum monthly salary of not more than Bt20,000, the minister said.

Cabinet also approved the draft digital-economy law and a draft amendment to the Cyber Crime Act, as well the draft of a new National Broadcasting and Telecommunications Commission law.

The new NBTC law will see the number of board members at the NBTC cut from 11 to seven. It will also empower the regulator to reclaim spectra from state telecom agencies and seek compensation for them.

The Cabinet also gave the nod to the Mass Rapid Transit Authority to start civil engineering work on the Orange Line – a mass-transit route from Thailand Cultural Centre to Min Buri – at a cost of over Bt82 billion.