The Finance Ministry is considering using funds under Section 28 of the State Fiscal and Financial Discipline Act for the digital wallet handout scheme, according to Finance Permanent Secretary Lavaron Sangsnit.

Section 28 of the State Financial and Fiscal Discipline Act of 2018 allows the government to assign state agencies to carry out activities, measures, or projects that involve compensating expenses or revenue losses, provided these actions fall within the agencies’ legal duties and objectives. The goal is to stimulate the economy, improve living standards, and assist those impacted by natural disasters or sabotage. The cabinet must consider the potential fiscal burden and the impact on the operations of the assigned agencies, ensuring that the total compensation does not exceed the rate set by the State Fiscal and Financial Policy Committee. Agencies must prepare financial cost estimates and management plans for the entire burden and inform both the State Fiscal and Financial Policy Committee and the Finance Ministry.

Initially, the government planned to finance the 500 billion baht digital wallet project from three sources: the budgets for 2024 and 2025, and funds from Section 28 by borrowing 172 billion baht from the Bank for Agriculture and Agricultural Cooperatives (BAAC). However, critics argued that borrowing from the BAAC might violate the Financial and Fiscal Discipline Act and affect the bank’s liquidity. As a result, the government reduced the project’s budget to 450 billion baht and decided not to use funds from Section 28.

Lavaron emphasized that the Ministry will continue to follow established fiscal management practices, with Section 28 remaining a viable option. “We are still using our fiscal management methods, and Section 28 is an option. However, we’ve currently allocated 450 billion baht, which we believe will be sufficient for the anticipated number of participants,” Lavaron explained.

Funding will now come from two primary sources: an additional budget bill for 2024 amounting to 122 billion baht, combined with an extra 43 billion baht from budget management, totaling 165 billion baht. The remaining funds will come from the 2025 budget, which includes an increased budget of 152 billion baht and an additional 132 billion baht from budget management, totaling 284 billion baht. Lavaron assured that if all eligible citizens, approximately 50.7 million people, register for the project, there will be no need for additional funds. However, the exact number of registrants will not be known until the end of September.

Addressing concerns about the 2024 budget carrying over into the 2025 fiscal year, Lavaron clarified that expenses can only be carried over if contracts were committed before the fiscal year ended, such as those with private sector contracts. He stated that the use of the 2024 budget complies with the law, as verified eligible citizens’ acceptance into the project qualifies for carry-over budget usage. Eligibility conditions for the digital wallet project include being at least 16 years old by March 31, 2024, having an annual income not exceeding 840,000 baht for the 2023 tax year, and having no more than 500,000 baht in bank deposits as of March 31, 2024.

Additionally, the Finance Ministry is working on integrating the digital wallet with existing financial infrastructure to ensure seamless transactions and reduce administrative burdens. The ministry is also considering public feedback and potential socio-economic impacts to refine and improve the digital wallet project, ensuring it meets the population’s needs while maintaining fiscal responsibility. Through these efforts, the Finance Ministry aims to develop a robust digital wallet system that supports economic recovery, enhances public welfare, and adheres to fiscal discipline.