The Finance Ministry is confident the cabinet's decision to extend the diesel excise tax cut by another four months will not affect the country's fiscal status as net revenue collection for fiscal 2023 is expected to exceed the target, says Deputy Finance Minister Santi Promphat.
The cabinet on Tuesday agreed to extend the excise tax cut of 5 baht per litre for retail diesel prices for another four months to May 20.
The excise reduction, which initially started with a three-baht cut in February last year, was scheduled to end on Jan 20 this year.
The tax cut of 5 baht per litre will lead to a loss of state revenue of around 10 billion baht per month, or roughly 40 billion during the extension period, Mr Santi said.
This is the sixth extension of the diesel excise tax cut. The previous five extensions cost the state coffers 98 billion baht.
He said the extension of the measure is necessary to help people coping with rising living costs and higher prices of goods and services.
The lower revenue as a result of the tax cut will not affect the government's fiscal status, as net revenue collection is estimated at 2.6 trillion baht in fiscal 2023, exceeding the target by 110 billion, said Mr Santi.
Government revenue collection in the first two months of fiscal 2023 was 424 billion baht, which was 55.4 billion more than the target.
The government budgeted expenditure for fiscal 2023 at 3.18 trillion baht, with a deficit of 695 billion baht, the latter equivalent to 3.7% of anticipated GDP.
The cabinet last month approved a mid-term fiscal plan for 2024-27. Under the plan, the government targets reducing the deficit to 2.79% of GDP at the end of fiscal 2027.
The ratio of public debt-to-GDP is expected to be 60.6% in fiscal 2023, before rising to 61.3% at the end of 2027.
Mr Santi said the government expects the treasury cash balance to tally 710 billion baht at the end of fiscal 2023.
In a separate development, the cabinet on Tuesday agreed to place 56 items on the price control list, 51 of which are products.
The cabinet approved price controls for another year for face masks, synthetic fibres for face mask production, alcohol gel, paper for recycling, and chicken.
Five items on the list are services.
The price control list covers essential daily-use items such as food, consumer products, farm-related products (fertilisers, pesticides, animal feed, tractors and rice harvesters), construction materials, paper, petroleum and medicines.
The foods listed include garlic, rice paddy, milled rice, corn, eggs, cassava, wheat flour, powdered/fresh milk, sugar, vegetable/animal oil and pork.
The services listed include the right to distribute copyrighted music for commercial purposes, trading services and/or shipping services for online businesses, agricultural services, medical services and other services of healthcare facilities, and payment services at the point of service.