The Finance Ministry is expected to propose cutting the excise tax on diesel to the cabinet on Tuesday, in a bid to ease the impact on the cost of transport, a ministry source said on Monday.
Finance Minister Arkhom Termpittayapaisith and Energy Minister Supattanapong Punmeechaow had discussed the proposal, as high oil prices are affecting costs in all sectors, the source added.
The Excise Department collects diesel excise tax of 5.99 baht per litre — totalling 12 billion baht a month or 144 billion baht per annum — from the country’s monthly diesel consumption of approximately 2 billion litres.
The source said the Finance Ministry is also concerned about the impact of a tax cut on the country’s revenue, as the diesel excise tax is one of the main contributors to the state coffer. If a cut in the diesel excise tax is approved, the government would have to seek revenue from other sources to offset the loss would seek revenue in order to offset the loss.
The source said that some past administrations had cut the diesel excise tax during times of high oil prices. However, this government had gradually raised it to the current level.
In a related matter, Fiscal Policy Office director-general Pornchai Thiraveja said that during the first four months of the 2022 fiscal year, from October 2021 to January 2022, the government was able to collect net revenue of 758 billion baht, higher than the target for the first four months of the same fiscal year by 6%, or 42.6 billion baht.
The amount is 6.1% higher than that recorded during the same period of the previous fiscal year, he added.
The Revenue Department’s revenue collection and state enterprises’ revenue contribution to the state coffers in the first four months of the 2022 fiscal year were higher than projected by 14.3% and 14.7%, respectively.
The department’s higher revenue contribution is attributable to the greater collection of value-added tax and corporate and personal income tax, in line with import growth and the recovery of corporate and personal income due to the economic recovery.
Last week, Mr Arkhom said he was considering using the remaining funds from the 500-billion-baht in borrowing under the second emergency loan decree to ease the impact of high oil prices on the cost of living.
Mr Arkhom said the ministry needed to weigh the legality of whether the government can spend such funds to ease the burden of high oil prices.
The emergency loan decree has more than 100 billion baht remaining after being used to finance stimulus measures to mitigate the impact of the pandemic on the economy.