Govt nods to Bt9-bn relief

Government Spokeswoman Thitima Chaisang said the Cabinet approved Bt112.84 million, divided into Bt50 million for industry relief centres, Bt22 million for environmental management and industrial waste disposal, Bt25 million for water, soil and toxic substance monitoring and Bt15 million for water drainage at submerged industrial parks.

The Cabinet also approved Bt2.55 billion to pay flood-affected households compensation of Bt5,000 each. 

It agreed to subsidise soft loans from the Government Savings Bank to industrial operators that plan to build flood barriers. The compensation will be curbed at Bt4.43 billion plus an interest subsidy of 4.22 per cent for seven years. 

The Cabinet allocated flood-relief funds of Bt935 million to rehabilitate Don Mueang Airport, Bt4.94 billion to repair roads and Bt900 million to renovate 790 schools. 

Finance Minister Thirachai Phuvanatnaranubala said the infrastructure fund to be run by state enterprises aims to encourage state enterprises, firms and individuals to join in road, rail (regular and high-speed), port, airport and other key infrastructure projects. 

Investors in the fund will be exempted from paying the 10-per-cent dividend withholding tax for 10 years. 

The value-added and specific business taxes and stamp duty will be waived for those transferring assets to the fund or to state enterprises, but they must have contracts for the properties to be transferred back to them.

The transaction fee of 2 per cent will be cut to 0.01 per cent and the mortgage fee of 1 per cent to 0.01 per cent. The rental-property registration fee of 1 per cent will be reduced to 0.01 per cent but not more than Bt100,000. These tax cuts will benefit the infrastructure fund. 

The tax breaks would result in government losses of Bt1.2 billion but the government can reduce the public debt burden by Bt2.7 billion per year, leaving a net saving of Bt1.5 billion. The Cabinet also approved a proposal to raise public debt plan for fiscal 2012 from Bt1.29 trillion to Bt1.65 trillion. 

The state needs to borrow more to finance the rice-pledging scheme, which will cost Bt269.16 billion, and to refinance treasury bills worth Bt94.8 billion. It also needs Bt149.11 billion to restructure the economy.

The Cabinet also acknowledged the Energy Fund’s plan to borrow Bt10 billion. The new borrowings will push the public debt up to 43.5 per cent of gross domestic product next year, but that is still manageable, not exceeding the alarm level of 60 per cent, Thirachai said.