The cabinet on Tuesday agreed to extend the excise tax cut on diesel by 5 baht per litre for another four months to keep prices below 35 baht per litre to help ease the costs of living.
The tax cut, the sixth in succession, will last until May 20 and will cost the government about 10 billion baht in lost revenue per month, or 40 billion baht in total, acting government spokesman Anucha Burapachaisri said.
All told, the six extensions represent about 138 billion baht in lost tax revenue.
“The diesel tax cut is intended to keep domestic diesel prices from going up quickly, affecting the people and the business sector,” he said.
“The Finance Ministry will closely monitor international oil prices to determine an appropriate cut of the excise tax on diesel to stabilise the country’s financial status."
Finance Minister Arkhom Termpittayapaisith said the measure would not affect overall revenue collection in fiscal 2023, according to Mr Anucha.
Mr Anucha quoted Prime Minister Prayut Chan-o-cha as saying that without a subsidy, the price of diesel would have risen to about 40 baht a litre long ago.
If diesel prices were allowed to go up, goods prices would certainly be adjusted accordingly because diesel and electricity constitute a major cost of production and transport in the industrial sector, Deputy Finance Minister Santi Prompat said.
If global oil prices decrease, the diesel tax cut would be adjusted lower as well, he added.
According to Mr Santi, since the beginning of fiscal 2023 on Oct 1 last year, the Finance Ministry has collected more than 55 billion baht in revenue. The ministry is confident it would be able to collect about 2.6 trillion baht, exceeding the target of 2.4 trillion, for the full year.
Mr Arkhom said last week that the country's public debt-to-GDP ratio rose to 61.4% in fiscal 2023, above an earlier estimate of 60.4%, after the inclusion of the Finance Ministry's total guarantee for borrowings by the Oil Fuel Fund — totalling 110 billion baht — in the country's public debt management plan.