Lower shortfall expected for full-year tax collection

Lower shortfall expected for full-year tax collection

The Finance Ministry is optimistic the country's tax revenue for 2015 will miss its target by just 100 billion baht.

Revenue Department director-general Prasong Poonthanes previously forecast a shortfall of 160-200 billion baht or 8-10% lower than the revenue target of 1.96 trillion.

"After four months, we're changing our estimation because it looks likely that we'll do better than that. We might miss by only 5-6%," Mr Prasong said.

For the first seven months of fiscal 2015 (through April 30), the Revenue Department reported total tax collection of 826 billion baht, about 10 billion baht or 1% higher than year-earlier levels but still slightly off target.

Mr Prasong said corporate income tax for 2014, due to be submitted this month, would be depressed by the current economic slowdown.

A 23.5% rise in first-quarter tourist arrivals, however, is expected to boost value-added tax (VAT) revenue. 

Mr Prasong said VAT revenue should rise by 11% year-on-year, putting it fairly close to the target.

The sharp decline in oil prices is forecast to trim excise tax revenue by 40 billion baht and VAT revenue from retail petrol by 60 billion baht.

Corporate tax receipts will be hit as well.

PTT Plc, the state-backed energy conglomerate, posted a net profit of 90 billion baht last year but expects only 60 billion at most this year.

Moreover, the department expects shrinking revenue from the steel business in the tens of billions of baht.

To serve the finance minister's policy of eliminating tax avoidance, Mr Prasong has assigned officials to survey markets regularly.

Those flea markets and fresh markets where most operators shirk the tax system will fall under particular scrutiny.

The International Monetary Fund reported Thailand experienced as much as 14% VAT avoidance compared with euro-zone countries, where the figure is closer to 17%.

Finance Minister Sommai Phasee has demanded a 10% increase in revenue from normal tax item collections this year.

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