Revenues exceed target, but tax drops short
Figures released by the Fiscal Policy Office showed the government’s total revenue for the first quarter of the 2015 fiscal year (which commenced at the start of October 2014) exceeded the original target by one percent, or 5.13 billion baht, to reach 506 billion baht in total. This higher than expected result was partly due to greater than expected contributions from state enterprises and agencies.
On the negative side, tax revenues missed their target by 2.9 percent, or 14.3 billion baht, in the first quarter.
Economic growth in the final quarter of 2014 was very slow due to delays in public investment, lukewarm exports, and increasing household debt which made consumers cautious in their spending habits. The Bank of Thailand estimated growth at 2.7 percent.
In some areas the revenue targets set by the Fiscal Policy Office exceeded expectations, in others there was a shortfall. For example, Value Added Tax (VAT) charged on domestic sales and services exceeded the target by 2.4 percent.
Elsewhere, the targets all fell short. Revenue from corporate income tax fell 11 percent short, while VAT on imported goods was 3.5 percent below forecasts, although this was largely due to the falling price of oil.
The Excise Department missed its target by 3.83 billion baht, or 3.6 percent, even though overall collections amounted to 102 billion baht in tax revenue. The department noted the three key areas where revenues failed to reach their targets were from motor vehicles -down a substantial 19.2 percent- and alcohol.
The Customs Department missed its collection target by 1.9 percent, earning 30.3 billion baht, which was 574 million baht lower than anticipated. The increase in excise tax on diesel helped to reduce the shortfall to the above-mentioned 1.9 percent.
The concern for the government is that even though GDP is expected to come in at around four percent for this year, the Revenue Department has stated it has only a small chance of achieving its collection target of 1.965 trillion baht.
That revenue target was based on the 2014 fiscal year’s revenue aim of 2.275 trillion baht, plus a further 50 billion baht. Yet revenue collection in 2014 fell almost 200 billion baht short of the original target. So, in reality, the new target figure has been set at almost 250 billion higher than ever previously achieved.
The government has set a target of collecting 2.325 trillion baht in the 2015 fiscal year and set expenditure at 2.575 trillion baht, an overall deficit of 250 billion baht.