July 22, 2014 00:00
By Suphannee Pootpisut,
The Finance Ministry may launch a second issue of high-coupon savings bonds in compliance with National Council for Peace and Order (NCPO) policy, after full subscription of the first Bt30-billion bond issue.
Meanwhile, a million farmers are expected to receive assistance from the junta by November, especially loan extensions with special conditions.
“We will finalise whether to launch the bond issue, given the expenditures entailed, by the end of this month,” Rungson Sriworasat, permanent secretary of the Finance Ministry, said after chairing a meeting of ministry executives. “The NCPO wants us to increase the size of the issue at a high coupon rate.”
The ministry’s first Bt30-billion issue of seven-to-10-year savings bonds with a coupon rate of more than 4 per cent was fully subscribed. That issue was in response to the NCPO’s policy to “return happiness to people”.
However, the ministry may be Bt160 billion short of the tax revenue anticipated for fiscal year 2014, Rungson said. The Revenue Department alone expects a shortfall of nearly Bt100 billion, while the shortfalls for the Excise and Customs departments are expected to be Bt40 billion and Bt20 billion respectively.
About Bt50 billion of that will be offset by reimbursement from the National Broadcasting and Telecommunications Commission and Bt12 billion from the Thai Asset Management Corporation.
Although the government has not collected as much revenue as targeted, that will not affect management of expenditures, as actual government expenses, particularly investments, do not follow targets, Rungson said. The country’s fiscal stance is also strong with a balance of Bt380 billion.
He said there was no discussion at this meeting of the planned tax restructuring.
“We’ve proposed guidelines for tax restructuring [to the junta]. We’re waiting for the NCPO’s consideration,” he said.
The proposed restructuring relates to those departments responsible for tax collection, particularly the Revenue Department. Corporate and personal income-tax rates are those set for review.
There has also been discussion on whether to increase tax privileges for small and medium-sized enterprises.
Meanwhile, the Agriculture Extension Department is speeding up its push to get farmers registered for low-interest loans, again in line with the junta’s “happiness to the people” policy.
First, the farmers will be given compensation not exceeding 3 percentage points for their loans, to a maximum of Bt50,000 per person. Generally, the loans extended to farmers cost them 7 per cent in interest annually.
Second, the farmers will also be offered loans with a grace period while they are waiting to sell their rice, amounting to not more than Bt200,000 per person.
“The department has started educating some of the 1 million farmers targeted [to receive the assistance] by November on what assistance they will given by the junta,” said the department’s director-general Oran Pitak.