GOVERNMENT REVENUE / Income slows as taxes shrink

Written by Writer on Tuesday, November 11th, 2008

GOVERNMENT REVENUE / Income slows as taxes shrink

WICHIT CHANTANUSORNSIRI

Government revenues fell 9.4% below its target in October, as tax proceeds slowed due to the weak economy, according to the Finance Ministry.

Revenues for the first month of fiscal 2009 totalled 91.9 billion baht, a drop of 18.4% from the same period last year, according to Somchai Sujjapongse, the director-general of the Fiscal Policy Office.

Dr Somchai said tax revenues missed their budget targets for the month, particularly taxes on oil revenues due to the government’s anti-inflation programme.

The six-point programme, which expires in January, includes excise tax reductions on diesel and gasohol and was adopted earlier this year when oil prices hit a peak of nearly $150 per barrel.

Dr Somchai said the Electricity Generating Authority of Thailand also delayed profit transfers to the Finance Ministry worth 7.15 billion baht in October, further affecting budget figures for the month.

But Dr Somchai noted that value-added tax collections, a proxy for the health of domestic consumption and spending, rose 9.2% in October from the year before and exceeded targets by 3.1%.

Corporate income tax payments also exceeded figures last year by 2.2% and rose 9.4% over targets, suggesting that revenues and profits for the private sector remained relatively healthy despite the downturn in the global economy.

But excise tax revenues for beer, alcoholic beverages, tobacco and autos all posted declines year-on-year in October, showing that consumers were cutting spending on unnecessary goods and delaying large spending decisions.

Bangkok Post
Tuesday November 11, 2008