FRIDAY, March 29, 2024
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Stronger scrutiny of 'sin tax' funds is welcome

Stronger scrutiny of 'sin tax' funds is welcome

Public agencies face financial oversight but have retained precious independence

The “verdict” is out. To the relief of three public agencies funded by the “sin tax”, the Charter drafters have dropped the idea of halting their funding through levies collected from the sale of alcohol and cigarettes.
Instead, a new provision will require that the agencies’ spending be screened by the national evaluation commission, which means they will have to prove that their operations are efficient and in the public interest. Transparency is mandatory under the new draft charter. 
The decision on the so-called sin tax had been much-anticipated by public broadcaster Thai PBS, the Thai Health Promotion Foundation (ThaiHealth) and the Sport Development Fund. The three independent agencies have good reason to fear the budgetary constraints that an alternative source of funding would bring. To maintain its public-service role, Thai PBS must steer clear of undue political or bureaucratic influence, while ThaiHealth’s independence depends on its ability to withstand the sophisticated and well-funded lobbying of tobacco and alcohol producers. Likewise, the Sport Development Fund risks becoming a political tool if its budget is placed in the hands of lawmakers. 
Academics had raised concerns of a backlash had the funding been cancelled. ThaiHealth has put the “sin tax” money to good use, making impressive inroads in combating the dangers associated with the “sins” of smoking and drinking. That progress seems to have been recognised in the charter drafters’ decision to drop an amendment that would have altered the agency’s source of funding. 
However, all three agencies operate without third-party financial oversight, leaving them prone to criticism they lack transparency.
Despite their public-service mandate, the agencies should not be permitted to spend public funds in the absence of independent scrutiny. The charter drafters have spotted this loophole, which opens the way to overspending. This, in turn, brings fear that the agencies could be infected by nepotism and other corrupt practices. 
In addition, the “sin tax”-funded organisations are not constrained by a budget ceiling and are entitled to keep any surplus funds at the end of each year. This weak point has been plugged with a provision in the draft charter that limits their budget. 
The charter drafters say the changes are necessary and will benefit the public as a whole. Under the new requirements, the three organisations will have to prove their spending is both effective and worthwhile. The changes should further strengthen their status as well as help silence their critics. But more significantly, the move will prevent unscrupulous politicians and officials from exploiting the “sin tax” for their own gain. Similar such plundering of budgets for populist policies has plagued Thailand for decades, siphoning huge amounts of money away from its intended public targets and into the pockets of greedy individuals. 
The three organisations should embrace the new draft law as a safeguard of their future status. Having their spending checked by the national evaluation committee will bolster that status with the asset of transparency. They need not fear the changes as long as they can maintain their independence and operate with minimum interference from the politic realm.
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