Govt stimulus to back 2% GDP growth: Sommai

Sommai also said the draft bill for the proposed inheritance tax would soon be forwarded to the Cabinet for approval.

He said the targeted 2-per-cent expansion of GDP should be achieved as the stimulus package included the acceleration of budget disbursement, the one-off payment to farmers of Bt1,000 per rai for a maximum of 15 rai (2.4 hectares), and a bid to create jobs.

He said that if exports were not affected by unexpected developments and continued to grow, economic growth was expected to be more than 2 per cent. “We believe the measures will boost the economy considerably,” Sommai said.

He said revenue from the tourism sector could also help prop up the economy and the Finance Ministry was reviewing tax measures that could help promote tourism. 

Relevant agencies would be assigned to monitor the government’s stimulus measures. 

Sommai said the financial assistance to farmers would start in the middle of this month. 

He denied the measure was a populist policy, or “Prayutism”, amid the economic slowdown.

He said a number of poor farmers did not gain from the scrapped rice-pledging scheme and had also suffered as a result of a sharp drop in rice prices. 

“We are not one of the European countries that have no room for fiscal policy. Our fiscal status remains strong,” he said.

Sommai said the government was focusing on assisting small-scale farmers.

He said it was not an appropriate time to give civil servants a pay rise.

“We are not closing the door on the salary raise [but] now is not the right time for it,” he said. “And the [salary] rise would not give much stimulus to the economy. Therefore, we have focused more on lower-income earners.”

He said that mid-month the draft bill for the inheritance tax would be sent to the Finance Ministry before being forwarded to the Cabinet by early November at the latest. It was expected to come into law next year. The ministry will narrow loopholes in the legislation for inheritors and others, with the bill to be reviewed by State of Council. 

“The tax rate on inherited assets will be levied at 10 per cent but we will allow adjustments to tax rates, possibly in three to five years after the law’s effective date,” he said.

Sommai said the ministry was also reviewing the draft of the land and building tax bill, which might be proposed to the Cabinet shortly after the inheritance tax bill.

The land and building tax legislation will be enforced after the completion of land-price assessments, possibly 18 months after its enactment.

Meanwhile, Deputy Prime Minister MR Pridiyathorn Devakula agreed the Bt324.47-billion stimulus package would bear fruit this year, especially the measure aimed at increasing income for farmers and the disbursement of the Bt23 billion in reserve budgets. The disbursement includes the Bt15 billion left over from the “Strengthening Thailand” project.

In an interview with the Nation Group yesterday, Pridiyathorn said the government would introduce more elements of the stimulus package but declined to provide details.