Departing finance minister Sommai expresses hope for continuity by new Cabinet

“We all know each other,” he said, referring to the present and inbound Councils of Economic Ministers and incoming deputy prime minister for economic affairs Somkid Jatusripitak, and he is “acquainted with” his successor Apisak Tantivorawong. “I do have some points to leave behind, since I am concerned about the continuity of the [current] work at the ministry.”

Among his concerns is the introduction of the land and buildings tax, the draft bill for which Sommai has signed, he said yesterday. He also wants to see progress on the new tax measures aimed at lowering economic inequality and increasing government revenue that are waiting for the approval of the new Cabinet.

He said the reform of the tax system was incomplete. There remain loopholes allowing people to avoid paying their taxes, and he said he had recently instructed the Revenue Department to continue its efforts to improve tax-collection efficiency.

“Another point of concern is the Bt730-billion loan to mitigate the government’s debts that were built up by the rice-pledging scheme, the SRT [State Railway of Thailand], and the BMTA [Bangkok Mass Transit Authority], and the debt owed to the Social Security Office,” he said. The loan in question was being transformed into a long-term (20-year) period, “and is currently waiting for approval from the Cabinet”, he added.

Sommai said the law regarding long-term mortgages between the government and the private sector should be amended from the current 30-year period to 50 years, which has been initiated by the Finance Ministry and is under the consideration of the Interior Ministry. 

The change would encourage an increase in long-term investments in the country.

“These concerns that I have left behind are mostly long-term measures that are needed for the country’s prosperity, while short-term economic stimulus will have to be decided by the new Council of Economic Ministers, as my duty is done,” he said.

He also stressed the importance of allowing the government’s infrastructure mega-projects to “take off”, while smaller ongoing projects have already been arranged into series for the decision of the new Cabinet. 

“Some people may have the view that what I have done at the ministry is increasing taxes, but so far all the ministry has done is decrease taxes, and the reform of the tax system is more important for the future of the country than any populist policies,” he said.

Maybank Kim Eng Securities (Thailand) said the list of candidates for the economic cabinet was starting to get exciting, as Somkid was to take over its leadership from MR Pridiyathorn Devakula while existing transport projects should continue, with the current deputy transport minister Arkhom Termpittayapaisith, moving up to transport minister. Also, business sectors expect Atchaka Sibunruang, the incoming industry minister, to work with them.

“We believe the financial markets will welcome the new economic team,” said Tim Leelahaphan, economist and assistant vice president of the firm’s research department. “This is opposite to how markets reacted to the current Cabinet a year ago. 

“We continue to expect there could be an economic stimulus package from the new Cabinet. It is interesting to note that some of them served in the Thaksin [Shinawatra] government.”