The government’s revenue collection for the 2014 fiscal year is expected to fall at least 50 billion baht short of its target due largely to the faltering economy and overestimated excise diesel tax, an informed source at the Finance Ministry said.
If that is the case, revenue collection will be at least 2% below the target, the source said.
The government has set revenue collection for this fiscal year ending Sept 30 at 2.275 trillion baht and expenditure at 2.525 trillion, leaving a budget deficit of 250 billion. However, the deficit is likely to be higher if revenue collection is well below the target.
An assumption that the Excise Department can levy an additional 30 billion baht from a gradual rise in diesel tax has been counted in the revenue collection target, the source said.
The excise tax on diesel has been kept at 0.5 satang per litre after the Abhisit Vejjajiva administration cut the rate from 5.31 baht a litre in 2010 to help ease the cost of living.
As the 2014 budget was planned when the Finance Ministry’s economic growth forecast stood at 4.5%, payments of the third-generation mobile licences in the previous fiscal year instead of this fiscal year have also contributed to the expected fall in revenue collection, the source said.
The Fiscal Policy Office last month cut its 2014 gross domestic product growth forecast to 2.6% and warned an even lower growth is likely if the political unrest drags on, while the Bank of Thailand on Wednesday warned economic growth might come in weaker than its forecast of 2.7% and that quarterly growth for the January-March period was expected to have shrunk.
For the first six months of this fiscal year, the government collected 1.11 trillion baht in gross revenue and 935 billion in net revenue when tax rebates and contributions to local administrative organisations were deducted.
Net revenue was 20 billion baht below the target.
The Revenue Department, which typically contributes around 80% of the government’s overall revenue, expected its tax revenue for this fiscal year will be 1.76 trillion baht, falling 7.1% short of the target of 1.9 trillion.
The source said the Fiscal Policy Office, however, believed the Revenue Department had underestimated tax collection for this fiscal year.
In the meantime, caretaker Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong has confirmed the caretaker government has no plans to raise value-added tax to 10% from 7% after the current rate expires in September, as it does not want to increase people’s burden.