Savings accounts target financial stability

New scheme is part of an effort to rejig tax deductions and exemptions

- WICHIT CHANTANUSORNSIRI

The SET adopted Japan's model to encourage Thais to develop financial discipline through stock investment and to promote long-term investment rather than short-term speculation.

Finance Minister Ekniti Nitithan-prapas, 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.

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.