Yala: A local administrative organisation (LAO) is facing a cash crunch due to dwindling tax revenue and insufficient funding from the government.
Pongsak Yingchoncharoen, mayor of Muang Yala municipality, said his office has been struggling financially and believes that several other LAOs are in the same situation.
He said the municipality has earned almost zero tax income over the past few years following the abolition of the house and land tax, yet the enforcement of the new land and buildings tax was postponed to this year.
Even though the new law has taken effect, only small amounts of tax have been collected because the government ordered LAOs to slash tax by 90% to alleviate impacts of the Covid-19 pandemic and the central funds earmarked for LAOs in the next 2021 fiscal year starting in October are also insufficient.
Mr Pongsak said the LAOs have three sources of income: tax revenue collected under the land and buildings tax; revenue-sharing by the government from taxes such as value-added tax; and annual funds allocated by the government.
He added that earnings from the revenue sharing scheme during July and August are expected to fall 60% as consumer confidence has taken a battering mainly as a result of the Covid-19 pandemic which has weakened people's purchasing power.
Mr Pongsak said some community development projects will have to be put on hold due to the liquidity problem. He said schemes to prevent the spread of the Covid-19 are also funded by local budget.
"We only scraped through with the money to pay staff and we have to scale down some public services. We will have to tap into our cash reserve but it's not nearly enough to cover all the expenses," he said.
Mr Pongsak said he would hold talks with representatives of local communities next week.