Funds fall short for rebates

The Finance Ministry plans to withdraw 30 billion baht from Treasury reserves to pay tax rebates for first-car buyers, a source says.

The ministry had set aside only 7 billion baht of its own funds to be returned to first-car buyers, the source said yesterday. However, about 1.2 million cars were bought under the first-car scheme _ many more than forecast _ with tax rebates estimated at almost 100 billion baht.

The rebates will be paid as one-time payments to individual car owners, with 38 billion baht to be paid in the 2013 fiscal year.

The rebates will represent the return of the part of the purchase price that is made up of excise taxes. The source said turning to Treasury reserves is the easiest and quickest way to cover the shortfall.

Comptroller-General Manas Jamveha said the the department is considering siphoning money from unused central funds to cover the shortfall.

As of March 5, about 6.89 billion had been disbursed in tax rebates for 99,269 first-car buyers, leaving only 350 million baht left of the amount allocated for the rebate scheme, Mr Manas said.

He said the government needs to prepare for the payments despite reports of large-scale cancellations of vehicle purchase contracts.

A source said the government does not have many options, as diverting funds from other budgets or seeking loans will draw heavy criticism.

The tax rebate scheme is one of the Pheu Thai Party's populist policies which some criticise for increasing public debt.

If the government withdraws money from Treasury reserves, it is legally required to allocate a budget to return the money in the following fiscal year.

About the author

columnist
Writer: Wichit Chantanusornsiri
Position: Business Reporter