Jet fuel levy cuts could be extended

Jet fuel levy cuts could be extended

Mr Patchara said the extension of the excise tax reductions for jet fuel will help alleviate the plight of low-cost airlines. Apichit Jinakul
Mr Patchara said the extension of the excise tax reductions for jet fuel will help alleviate the plight of low-cost airlines. Apichit Jinakul

The government is mulling an extension of excise tax reductions for jet fuel for another six months, claiming the impact of the pandemic on low-cost airlines remains unabated.

Patchara Anuntasilpa, director-general of the Excise Department, said the extension of the excise tax reductions for jet fuel will help alleviate the plight of the low-cost airlines, whose passenger numbers stand at 20% of capacity.

The cabinet approved lowering the excise tax on jet fuel to 0.2 baht per litre from 4.726 baht in February as part of urgent aid measures for domestic airline operators during the outbreak. The reduction is scheduled to expire at the end of this month.

"Low-cost airlines are considered vital to promoting domestic tourism, which contributes up to 12% of the country's GDP," said Mr Patchara. "Extended aid measures, if given, could help shore up the country's domestic tourism."

He said any extension period will be based on the degree of the impact, while the consideration of another six months.

Mr Patchara said the extension of the jet fuel tax cut is unlikely to affect the department's tax revenue collection as the jet fuel tax contributes a mere 1 billion baht per year.

He said state-owned Government Savings Bank (GSB) is also preparing soft loans carrying an interest rate of 2% a year for 60 months to help ease the financial liquidity of aviation firms next month. The loans will be channelled through the Export-Import Bank of Thailand.

The GSB's soft loan scheme will be submitted for cabinet approval soon, said Mr Patchara.

He said any plans to levy new taxes, such as on salty foods or new goods, are unlikely anytime soon given the country's fragile economy.

"We must admit an excise tax that is too hefty is a double-edged sword, as it may trigger border smuggling," said Mr Patchara. "Any new taxes or tax hikes will aggravate domestic manufacturers and consumers in the country."

For the first 11 months of fiscal 2020 (October 2019 to August 2020), the department reported collecting a total 530 billion baht worth of tax revenue, down 6.53% from the same period last year. The top five revenue contributors were oil and oil products, comprising 206 billion baht, followed by automobiles at 77.7 billion, beer at 73.3 billion, liquor at 56.6 billion and tobacco at 58.1 billion.


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