Finance Ministry aims to limit revenue shortfall amid slowing economy

Permanent Secretary of the Ministry of Finance Lavaron Sangsnit has warned that government revenue collection for the 2025 fiscal year is unlikely to meet the target outlined in the budget documents, due to lower-than-expected economic growth.

“We are making every effort to maximise revenue collection this fiscal year,” Lavaron said. “If there is any shortfall from the target, our goal is to keep it as minimal as possible — even as we acknowledge that the economy is growing significantly below earlier projections.”

The original revenue estimates were based on an assumed GDP growth rate of 4.5–5%, but the actual growth for the year may come in below 2%, he said. This discrepancy has created a major challenge for fiscal planning and revenue forecasting.

Lavaron noted that the Revenue Department, the main agency responsible for tax collection, is working intensively to maintain its collection performance. However, with economic expansion falling short of expectations, meeting the original tax revenue goals is increasingly difficult.

To help narrow the gap, the ministry is also seeking to draw higher contributions from profitable state-owned enterprises (SOEs), particularly those with sufficient earnings that are not being reinvested. Still, this measure is expected to generate only around 100 billion baht, not enough to fully offset the shortfall.

Other revenue-supporting factors include higher global oil prices and improved car sales. However, much of the growth has come from electric vehicles (EVs), which are subject to lower tax rates.

Lavaron reiterated that the Finance Ministry aims to minimise the revenue shortfall and will ensure the 2025 budget can be closed without breaching fiscal rules. “We can draw from the treasury reserves within legal limits without resorting to borrowing, even if revenues fall short of projections,” he said.

The Ministry of Finance reported that the Thai government collected a net revenue of 1.704 trillion baht during the first eight months of the 2025 fiscal year (October 2024 to May 2025), falling short of projections by 12.75 billion baht, or 0.7%. However, compared to the same period last year, revenue rose by 28.83 billion baht, or 1.7%.

Key shortfalls came from lower-than-expected collections in automobile excise tax, corporate income tax, and value-added tax (VAT) from imports.

Revenue collected by the three main tax departments totalled 1.784 trillion baht — 55.62 billion baht (3.0%) below projections. The breakdown is as follows:

• Revenue Department: 7.79 billion baht below target (0.6%)
• Excise Department: 41.99 billion baht below target (10.6%)
• Customs Department: 5.83 billion baht below target (7.1%)

Part of the revenue shortfall in corporate income tax is attributed to a shift by some companies to file tax returns for net profits via the online system, with the filing deadline extending into early June 2025.

The Ministry of Finance stressed that it will continue to closely monitor and manage revenue collection in the remaining months of FY2025 to maintain fiscal stability and support the government’s policy agenda.

Cash-based fiscal balance under pressure

In terms of the government’s cash-based fiscal position, the Treasury received total revenue of 1.642 trillion baht during the same period, while budgetary disbursements amounted to 2.593 trillion baht.

To offset the deficit, the government borrowed 777.12 billion baht. As a result, the treasury reserve stood at 338.54 billion baht as of the end of May 2025.