Baht appreciation could affect government's tax revenue, but the Revenue Department is still maintaining its fiscal year collection target of 1.774 trillion baht.
Gains for the baht, which has broken 29 to the dollar, have cut into the income of export-oriented operators when converted into baht terms, leading to a lower tax burden, said Wanee Thasanamontien, the department's principal adviser on strategic tax administration.
Value-added tax (VAT) on imported goods is also lower, as the levy is based on dollar terms, she said.
"The Finance Ministry has not thought yet about whether we can achieve the target," said Mrs Wanee.
The baht, emerging as Asia's strongest currency against the greenback this year, reached the highest level since it was floated in July 1997 at 28.61/65 Friday, before weakening to 28.67/69 on Monday. The local currency has gained 6-7% against the dollar this year.
Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong recently ratcheted up the pressure on Bank of Thailand governor Prasarn Trairatvorakul, saying he thinks about ousting him every day the baht gains, though he does not possess this authority.
Mr Prasarn said Friday the baht's value was somewhat beyond its fundamentals.
Mrs Wanee said the corporate income tax cut to 20% this year from 23% last year will cost around 80 billion baht in revenue for this fiscal year, but could be offset if corporate firms earn the minimum net profit margin of 25%.
The Revenue Department is the largest revenue contributor to the government with over 70% of the government's total tax revenue collection, while VAT and corporate income tax are the department's biggest revenue sources.
The department aims for 710 billion baht from the VAT and 640 billion from corporate income tax this year.
About the author
- Writer: Wichit Chantanusornsiri
Position: Business Reporter