Tax revenue set to fall short by Bt15 billion
The government's tax revenue for this fiscal year is expected to fall short of its initial target by Bt15 billion, mainly because of the Bank of Thailand's requirement that commercial banks set aside expanded reserves in order to meet a new global accounting standard.
Revenue Department director general Sanit Rangnoi said yesterday that falling bank profits because of higher loan-loss provisions will be a major factor in the department falling about Bt15 billion short of its target of Bt1.14 trillion in revenue. Tax revenue has also been affected by the current slow-down in consumption and investment growth. Revenue from value-added tax (VAT) collections in the first four months of this fiscal year, which began on October 1, expanded by 8 per cent, compared with an average rate of 10 per cent. Lower import growth has also had a negative impact on VAT collections. Sanit said tax collections in February did not improve because consumers were still postponing their spending. He predicted that last month's tax revenue will miss its target by Bt500 million, making three consecutive months with tax shortfalls totalling Bt2.3 billion. Nevertheless, because of higher-than-expected collections in October and November, total tax revenue for the first five months of the fiscal year is expected to exceed its target by Bt500 million. He warned that if consumption did not recover, it would have a significant impact on corporate earnings, translating into lower tax revenue. The government plans to run a fiscal deficit of 1.7 per cent of gross domestic product this year, with total outlays of Bt1.57 trillion. Wichit Chaitrong The Nation
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