A sluggish economy coupled with heavy government spending particularly on social welfare, may force the Finance Ministry to raise taxes, permanent secretary for Finance Ministry Suparat Kawatkul said.
Tax revenues collected by the government during the first half of fiscal 2009 – October 1, 2008 to March 31, 2009 – declined significantly, Mr. Suparat warned.
During the period, excise tax collection fell more than 20 per cent year-on-year while revenue tax collection was down around 9-10 per cent.
Compounding this situation, corporate tax revenues are expected to fall drastically this August in line with the economic downturn, he said.
Already off by about 30 per cent year-on-year – almost equivalent to import tariffs collected by the Customs Department – value-added tax revenues are projected to decline further from next February, a decline Mr. Suparat attributed to the poor economy, slow spending by Thais and the drop in tourists numbers. This situation would improve significantly if international trade and tourism recovered, he said.
Mr. Suparat predicted if tax revenues fail to support government expenses and public debt then the government may have to increase tax levels across the board to 20 per cent of gross domestic product (GDP) from about 15-16 per cent of GDP now. (TNA)
Well done guys ! The government eventually understands that something is seriously wrong… Abhisit thought that he could have a blank check and could multiply the gifts, the silly subsidsies and other toys and tax cuts, for free or financed by debts, without any consequences (read here ).
Welcome back on earth mister Abhisit, where laws of physics (and finances) apply… 
The problem is obvious since several months… A quick look on taxes collections (my chart here), a little bit of common sense… it was enough to understand that Abhisit was running toward a wall… It was enough to understand that the hope of the Finance Minister to rely on corporate taxes in may and august was totally childish.
Korn said the government would receive huge amounts of cash from taxes in May.
When did he say that ? February 1…
Korn is nothing but a clown.
…heavy government spending particularly on social welfare…
(cough cough)… defense budget… (cough cough)
Indeed…
the 6 new swedish jet fighters for the thai army are totally “welfare compatible”.
Those toys are designed for the “welfare” of the military of course, AKA their purse.
Nothing is too nice for our brave soldiers, guards of the Land Of the Free.
In the western world calling dignitaries ‘a clown’ is more or less accepted (although persons involved may not like it). This may not be the same in Thailand. Aren’t you afraid for consequences ?
In todays BKK Post, Korn apparently says: “the Government seeks another 800 billion baht loan to stabilise its finances and pay for its economic stimulus scheme“.
I am not an economist but it does seem to me that this is all unravelling – almost every week they are saying that they got it wrong the previous week.
No need to panic though, the worlds best, the Thais, are on the case.
Bedwyr
army’s appetite is ever insatiable !
“oh, you wanna cut our guap flow ? we’ll see about that !”
“Defence Minister Prawit Wongsuwan said yesterday further Cabinet discussions were needed before any cuts were made to the 2010 military budget.
He said realised that all ministries would be affected because the government was planning to slash as much as Bt200 billion from its original budget of Bt1.9 trillion…
The military budget now accounts for 1.5 per cent of the GDP, which is considered small and there is some room for upward adjustment,” Prawit said…
Deputy Prime Minister Suthep Thaugsuban … said the government might be forced to reallocate the budget for 2010 because the revenue shortfall has been projected to be about Bt200 billion …”
http://www.nationmultimedia.com/2009/05/07/politics/politics_30102170.php
it is quite understandable why Prawit was made Min. of Defense – no doubt a condition by army to Abhisit when forming the government, to ensure nice fat piece from the shared cake.
imagine if Prawit becomes a PM, as now it is speculated as a very big possibility !
——————————–
meanwhile, currencies are going south
China warns of worldwide devaluations and inflation
http://gata.org/node/7408
but that doesn’t bother much soldier boys, does it ?
meanwhile Abhisit is gonna for a littly vacation – you know, all that tension during Songkran, the “assassination” attempts … it is time to relax a bit on tax-payers money !
coz who knows – may be it is the last chance before “blue” (aka Newin + Prawit) take over.
Thai PM to visit Hong Kong on promotional visit
http://enews.mcot.net/view.php?id=9820
read interesting comment on this event elsewhere on other blog :
http://lalida-fos.blogspot.com/2009/05/when-is-abbys-going-to-wake-up.html
Halfaboy : would you prefer “bozo” ?
Because it applies very well to Korn.
Thai or not thai… an alleged minister who was unable to understand on february 1 that all the forecasts about coming corporate taxes would be crunched by the global crisis, is a clown. Or a bozo.
Nothing less, nothing more.
Even highschoolers understand that during an economic downturn, profits of companies are decreasing… and therefore, tax collections too. But there is a lag effect… companies first have to close their fiscal year…
The problems started last quarter of 2008… That will show up in accounts… so corporate taxes in may (and then august) are going to be lower than last year. And the forecast for the year after with profits made 2009 is… very easy to do…
This is why the word “dignitary” does not apply to such people. They have no honor, no proper intellectual capacities, they don’t deserve to hold a public position…
@antipadshist:
Agreed vis-a-vis the military. One huge parasite.
Noticed the ineptitude of Prawit. In one sentence he inexpertly turned a possible budget cut into a possible budget increase, but he did so in the most gauche and obvious way imaginable – “ which is considered small and there is some room for upward adjustment.” Doubtless so that the armed forces can ‘negotiate’ for no change.
God almighty, these people really do think that Thais and foreigners alike are completely stupid.
It is difficult to contemplate how people who are so intellectually challenged manage to take themselves so seriously really…
Bedwyr
“the government eventually understands that something is wrong”
well, congradulations to them !
coz it’s just about a time ….
Is The Crisis Over Yet?
http://baselinescenario.com/2009/05/15/is-the-crisis-over-yet-the-cbo-weighs-in/
“The Worst Is Yet to Come”: If You’re Not Petrified, You’re Not Paying Attention
http://finance.yahoo.com/tech-ticker/article/248398/%22The-Worst-Is-Yet-to-Come%22-If-You%27re-Not-Petrified-You%27re-Not-Paying-Attention
Marc Faber: Dump dollar, buy yuan, resource currencies, prison shares & ammo
http://moneytalks.net/index.php?option=com_content&view=article&id=1359:lookout-capitalisms-dead-us-going-bankrupt-and-there-is-going-to-be-war
The Truth About . . . Financial Oligarchy
http://maxkeiser.com/2009/05/16/1031-the-truth-about-financial-oligarchy-16-may-2009/
“the end of days” is nearer for USD as global reserve currency …
Chavez announces new Latin American currency
http://www.france24.com/en/20090417-chavez-announces-new-latin-american-currency-alba-sucre
“Venezuelan President Hugo Chavez has announced that an alliance of Latin American Countries (ALBA) will launch a regional electronic currency – the Sucre – that is expected to begin circulation by 2010.”