The Finance Ministry may need to revise the fiscal structure if the government introduces more social programmes that could affect long-term budgeting, said Sathit Limpongpan, permanent secretary for finance.
Sathit said the Finance Ministry plans to achieve a balanced budget by 2015 but the deadline could be extended if the government puts in place more social projects and the ministry needs to revise the fiscal planning.
He said Prime Minister Abhisit Vejjajiva wants to provide support to households having income of not over Bt120,000 a year both in rural areas and urban communities. To address social inequality, the ministry earlier considered only those whose annual income was below Bt18,000 per year. The government aims to narrow the huge income gap between the rich and the poor.
"New factors include the measures for the poor as well as cancellation of the Bt400-billion borrowing. On the revenue side, the tax structure could be reviewed, but new measures could be implemented at the appropriate time," he said, adding that the ministry may increase some tax items in order to cover the new cost of government spending. The ministry will also discuss with the Labour Ministry to solve the debt issue of unskilled labourers.
Sathit said that to help poor farmers, the ministry is considering an ambitious idea to set up a new fund to intervene in the commodities markets and also to invest in the Agricultural Futures Exchange of Thailand (Afet), with the aim of stabilising agricultural prices.
Finance Minister Korn Chatika-vanij's idea is intended to manage farm product prices at an appropriate level, he said.
The fund will also invest in the commodities market, as part of the strategy to correct market imbalances, he said. The fund will be a new tool available to policy-makers to coordinate government measures to shore up the prices of farm products. Currently, the government has income guarantees for farmers and directly buys farm products such as rice from farmers, but the system does not work well, Sathit said.
Observers were concerned that the government might be planning to waste tax money on politically motivated projects. While spending projects are being extended, the revenue side has shown few changes.
In a related development, Korn said he was working with the Revenue Department to launch new measures to support the capital market after tax incentives for listed companies expire in December.
Korn said he did not want listed firms to be treated better than non-listed firms. He said that it would take about a month to come up with new incentives for promoting the capital market.