Higher tax revenue could boost 2016-17 state spending
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The Finance Ministry thinks an 18-per-cent boost in state spending next fiscal year will be feasible thanks to improved tax revenue.
Meanwhile, the Bank of Thailand does not think exports will return to double-digit growth figures any time soon unless the manufacturing sector makes structural upgrades to meet global demand.
Finance Minister Sommai Phasee said at the “SET in the City” event yesterday that the government might be able to increase expenditures by 18 per cent in the 2016 fiscal year after its revised tax structures bring in more revenue.
“Don’t be surprised if the budget will be able to rise by 18 per cent,” he said.
To help prop up the economy, the government will also attempt to boost the level of investments in the budget from the current level of 5.5 per cent and try to benefit from the foreign reserves through investment, he said.
Meanwhile, Don Nakornthab, director of the BOT’s Macroeconomic Policy Office, said the “new normal” for annual export growth might be only 4-5 per cent at most. If world prices of agricultural products improve, that will help, but the Thai manufacturing sector needs to upgrade.
Previously, the central bank set a target for disbursement of 91.4 per cent of the current state budget, but its actual disbursement was 89 per cent.
If disbursement of the remaining budget is accelerated, the economy could improve, Don said.
Sommai said the Thai capital markets were not able to grow rapidly and economic sufficiency was a key, while strengthening the capital markets and encouraging companies to list on the bourse depended on legal issues that needed improvement.
Legal amendments for supervision of capital markets are under the consideration of the Council of the State.
He favours extending the deadline of tax privileges for long-term equity funds from the end of 2016, and a decision on this will be finalised in March next year.
He said the National Council for Peace and Order (NCPO), the National Legislative Assembly, the National Reform Council and the Constitution Drafting Committee had discussed holding a public hearing for the new charter.
“The NCPO and the government believe that will regain people’s and businessmen’s confidence,” Sommai said.
