Finance Minister Ekniti Nitithanprapas, who serves as head of the government’s economic team under Prime Minister Anutin Charnvirakul, has proposed a review of various tax deductions and exemptions.
The review encompasses adjustments to savings schemes that currently allow tax-deductible investment contributions via retirement mutual funds (RMFs) and Thai ESG funds, along with the introduction of a new model called the Individual Savings Account (ISA).
According to Mr Ekniti, the ISA will serve as a new tax-deductible savings instrument designed to replace the RMF, long-term fund (LTF) and Super Savings Fund (SSF) schemes. He emphasised the ISA can function as an investment vehicle that avoids market distortions while promoting more efficient long-term savings.
What is the ISA?
The ISA is derived from Japan’s Nippon Individual Savings Account (NISA). The Stock Exchange of Thailand (SET) adopted this idea to create the Thailand Individual Savings Account (TISA), aiming to encourage Thais to develop financial discipline through stock investment and to promote long-term investment rather than short-term speculation.
With flexible savings and investment mechanisms, attractive tax benefits, and potential government co-contributions, the TISA project is expected to become an important tool for strengthening Thailand’s financial market and supporting long-term economic development, said Mr Ekniti. The hope is TISA can help Thais adapt and respond with stability to future challenges, he said.
The concept draws inspiration from successful ISA programmes abroad, such as the UK’s, which increased national savings and investment through diverse account types (Junior ISAs and Lifetime ISAs) tailored to different goals and investment behaviours.
Meanwhile Japan’s NISA successfully encouraged households to shift from traditional bank savings to capital market investment, especially through long-term investment accounts such as Tsumitate NISA.
Turbines at a Gunkul Engineering wind farm in Nakhon Ratchasima. The company supports calls for the government to increase renewable energy usage.
What are the types of Thai ISAs?
The SET proposed a diversified TISA model designed to meet varying financial goals among Thais. Each account type serves a specific purpose, divided into four categories:
TISA-Savings (tax-exempt savings account): This is a savings account designed for medium- and long-term financial goals, emphasising capital safety, ease of use and flexibility. It can be used to build emergency reserves or cover essential expenses, helping individuals maintain accessible savings for retirement or other major life goals. Account holders are entitled to tax benefits under specified conditions.
TISA-Investment (investment savings account): This account is designed to promote investment in corporate and government bonds, individual stocks, mutual funds and exchange-traded funds (ETFs). The account encourages investment in the capital market and strengthens long-term financial stability.
TISA-Retirement (retirement savings account): This is a long-term savings account tailored to support retirement goals. The primary objective is to help individuals plan their long-term finances to ensure life stability and reduce financial risks during retirement.
TISA-Junior (child’s savings account): This account is designed to help parents plan their children’s financial future, consisting of Junior-Saving and Junior-Investment varieties. The goal is to prepare financial resources for children’s future needs, such as education, skill development, and other essential financial goals.
The TISA programme offers tax deductions for deposits or investments made in accounts, within specified limits. The maximum amount eligible for tax benefits across all TISA account types is 500,000 baht per year.
Under this scheme, TISA-Savings offers a maximum tax deduction of 100,000 baht per year, while TISA-Investment and TISA-Retirement accounts combined offer a maximum deduction of 300,000 baht per year. TISA-Junior provides separate limits: up to 30,000 baht per year for Junior-Saving and up to 70,000 baht per year for Junior-Investment.
For TISA-Investment, the account aims to encourage consistent participation in the capital market to promote long-term financial stability and enhance future wealth accumulation. Investors receive tax benefits in two forms — a tax exemption on investment returns and income tax deductions — to incentivise individuals to start regular investment planning.
This initiative supports the long-term growth of Thailand’s capital market, with investors required to hold their investment units for at least one calendar year, said Mr Ekniti. Early withdrawal or sale before the holding period results in the loss of tax benefits.
He previously said the ISA would allow individuals to choose their own investment instruments such as stocks or bonds according to personal preference.
In contrast, RMF and SSF investments are managed by fund managers, which may not always align with each individual’s investment style. Moreover, mass redemptions of LTF or RMF units in a short period can depress unit prices and cause investment losses.
The SET asked the Finance Ministry to grant tax benefits to investors via ISA accounts, allowing investment expenses to be deducted from taxable income, similar to RMFs. However, the eligible investments are limited to stocks listed on the SET.
Why do retirement-related tax deductions need to be revised?
The revision of these tax deduction measures is part of the Finance Ministry’s broader tax reform effort, driven by mounting fiscal pressures and persistently slow revenue growth.
Moreover, Mr Ekniti said there has been inequality in tax deduction benefit schemes, particularly for investments in RMFs, LTFs and SSFs, as high-income earners benefit significantly more than low-income earners.
Roughly 20 billion baht in tax refunds are issued annually under these schemes, of which about 16 billion or 80% go to high-income earners in the 30-35% tax bracket.
The revision of tax deductions, particularly those related to investment for retirement savings, goes beyond the ISA concept. The Finance Ministry is also considering setting a cap on deductible amounts, with salaried employees subject to personal income tax allowed to deduct expenses related to investments in debt instruments, capital markets or government bonds, up to a specified limit.
This adjustment to tax deductions is expected to have a greater impact on high-income earners, who tend to invest a larger portion of their income than the middle class.
The Revenue Department provides several types of tax deductions, including personal deductions and investment-related deductions supported by the government.
For example, SSF investment allowed deduction of up to 30% of assessable income, with a maximum of 200,000 baht per year. For Thai ESG funds, deductions are also allowed for up to 30% of assessable income, with a maximum of 300,000 baht per year.
Meanwhile, for mortgage interest payments, tax deductions of up to 100,000 baht are allowed. Life insurance premiums for policies with a term of at least 10 years allow tax deductions for the actual amount paid, not exceeding 100,000 baht.
These deductions are part of the government’s efforts to encourage savings and investment among individuals.
