State revenue for 2006 projected to be B24bn below target
Government revenue in the first 11 months of fiscal 2006 was 12.5 billion baht below the target, according to Somchai Sujjapongse, the deputy director-general of the Fiscal Policy Office. Revenue, after tax rebates from Oct 1, 2005 to Aug 31 this year was 1.262 trillion baht, or 1% under the target set under the 2006 budget, but 5.8% higher than in the same period of the 2005 fiscal year.
The Finance Ministry recently reported to the cabinet that revenue this year, originally targeted at 1.36 trillion baht, was likely to fall at least 24 billion below the target due to slowing economic growth and shortfalls in tax collections.
But the government will maintain an overall balanced budget for the year, with the cash shortfall to be offset by existing treasury reserves, now totalling around 100 billion baht.
According to tax figures, the greatest shortfalls had occurred in revenue generated by the Excise and Customs departments.
Authorities say customs tariffs have been affected in part due to the appreciation of the baht this year, which has resulted in lower revenue despite the overall increase in imports and exports. Tariff revenue has also fallen due to tariff rate reductions under bilateral and regional trade liberalisation policies.
The Excise Department has seen its revenue fall because of declines in petrol usage as pump prices have increased, although revenue in August rose 5.43 billion baht over the target.
For fiscal 2007, which begins on Oct 1, a budget is likely to be delayed for another seven to eight months pending the new election and formation of Parliament.
The delay will result in new state investment being pushed off until the second half of 2007. Authorities have also signalled that the new budget will almost certainly result in a fiscal deficit, as the government increases spending to help boost growth.
The government on Monday announced that second-quarter growth slowed to 4.9% year-on-year compared with 6.1% in the first quarter, due to base effects and the impact of rising energy prices.
The National Economic and Social Development Board has cut its full-year growth forecast to between 4.2% and 4.7%, down from an estimate of between 4.2% and 4.9%.
From : The Bangkok Post
By : PLA
Date : Sep 8, 2006