FPO may lower tax revenue target after oil price decline
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Partly in view of expectations of lower tax revenue on oil imports but also because last year's revenue targets were unrealistically high, the Fiscal Policy Office is likely to lower its overall fiscal 2015 tax-revenue target.
The original 2015 target was Bt2.32 trillion. That compares with a 2014 target of Bt2.27 trillion, which was missed by Bt200 billion.
FPO director-general Krisada Chinavicharana said the plunge in global oil prices would result in lower tax revenue from oil imports, prompting the office to consider cutting the overall target for this fiscal year.
Treasury reserves
“We cannot specify the figure for the revised tax revenue for fiscal year 2015, as the issue will have to be raised and discussed at a meeting of the three state agencies responsible for tax collection, before the finance minister can approve it,” he said.
He added that even if the revenue target is lowered, the projected government expenditure figure will remain the same.
One way of resolving this shortfall is to use the treasury reserves to keep expenditures in line with the original target, which is permissible. In fiscal 2014, tax revenue was Bt200 billion below target, while the treasury reserves were also short by Bt200 billion at the end of the fiscal year.
The FPO’s latest growth projection for Thailand’s gross domestic product this year is 4.1 per cent, while the domestic inflation rate is projected at 1 per cent.
