King Chulalongkorn’s teachings encapsulate the management philosophy of Sommai Phasee — decisive yet compromising.
Mr Sommai says he is “fit and firm” at 71 and up to the task of reforming the tax code. Pawat Laopaisarntaksin
“I remember well the teachings of King Chulalongkorn — considerate and your work suffers, sympathetic and you’ll have woes, credulous and you are ruined. It’s true,” says the 71-year-old finance minister.
Mr Sommai appears relaxed in a black suit as he relates why he decided to return to public service in Prime Minister Prayut Chan-o-cha’s cabinet.
As a career technocrat at the Finance Ministry with stints as director-general of the Fiscal Policy Office and ministry inspector-general, Mr Sommai took a bit of time thinking about the job after being approached by MR Pridiyathorn Devakula, the deputy prime minister and head of the government’s economic team.
“I am a person who makes quick decisions, particularly about my own personal life,” he says. “But for work, you need to stop and think. When you hold an important position, decisions have important ramifications. The higher the position, the greater the consequences and impact on people.”
After almost five months as finance minister, Mr Sommai admits his tasks are not painless amid the ailing economy, mounting public debt and fragile fiscal position.
However, the veteran is confident his accumulated experience in debt and fiscal management of over 30 years should yield great benefits. “I have been monitoring the problems the country is facing, but I am not too worried.”
His greatest concern is that Thailand has been moving backwards. “Thailand once outpaced other countries. But now we are chasing after them, including South Korea and Malaysia. So we have to do something about it.”
His concern has partially been translated into prudent tax policies and judicious budget allocation. He is among ministers who have made significant changes since taking the wheel.
Tax reform topped the list of the military government’s priorities since its takeover and it has laid all the necessary plans for restructuring. “I believe 99% of the plans are correct and I only have to implement them,” Mr Sommai says.
He says well-judged tax polices must be fair and able to extend the tax base and strengthen the economy so that it remains competitive in the global arena.
The implementation of inheritance and gift taxes and the land and buildings tax are essential to that goal. The moves have been welcomed by the general public after being ignored by elected governments for fear of losing votes and popularity.
The minister says the land and buildings tax has minimal rates and is not meant to burden people. It is aimed at improving land development and possession.
If implemented, the inheritance and gift taxes should generate annual revenue to the government of 10 billion baht, with the land and buildings tax generating 200 billion baht.
Raising value-added tax (VAT), which has been a formidable issue for previous governments, could be the next step.
No government has dared to increase VAT, which has been kept at 7% for years despite analysts suggesting a ceiling of 10%. However, the prime minister has come out to soothe the public, saying the government had not yet reached a decision and the rate should be increased only when the economy is back in shape.
Due to the brief term of the incumbent government, Mr Sommai stipulates that
all tax policies must be completed by
September, including those involving the Customs Department and the Excise Department, while effective dates can be set later.
Another equally important duty for the finance minister is to allocate the budget sensibly and prudently. It is said to be his mission to allocate more money to improve social welfare and public health.
His experience as a patient ailing from lung cancer has inspired him.
“When I was ill and in hospital, I saw for myself how differently the rich and the poor were treated. The 30-baht universal healthcare scheme is not as practical as it should have been. So I would like to improve overall social welfare and people’s quality of life.”
It is likely that a higher budget allocated for public health and social welfare will be reflected in the 2016 fiscal year. Mr Sommai’s plan also includes introducing the long-delayed National Savings Fund to benefit people as a whole.
Having served as a government official throughout his life, he once believed the bureaucratic system was sound. However, growing corruption cases and mounting damage involving government officials have changed his belief. The problem is rooted in every inch of governmental organisations and is hard to eradicate, he says.
“Politics has become very influential, but the bureaucratic system has continued to be weakened,” says Mr Sommai, adding that problems have stemmed mainly from human resources.
He admits the problem is severe and will take much longer time than this government’s term to solve. One hope is to recruit new blood and tighten the laws to make a radical change.
“Typically, Thais help each other well, but help in this case means to help each other cheat, not help the country,” he laments.
Despite his age and mounting challenges, Mr Sommai emphasises that he is still “fit and firm” to carry on his job.
Growing wisdom gathered from hard lessons has taught and somewhat changed him and the way he lives his life.
He has become a more compromising person at work, while his life-threatening cancer has wholly changed his diet and motivated him to take daily exercise.
“Since I took this job, unlike in the past, I have learned that there will be people who like me and people who hate me,” Mr Sommai says.
“But I need not justify my actions and decisions if I am certain they are the right ones. Don’t lose focus on work. On top of that, I enjoy working. I believe that every human being has to work.”