Chart, tax revenue : -12,8 % compared to last year

Somchai Sujjapongse, director general of the Fiscal Policy Office, yesterday said government revenue last month had missed the target by 10.6 per cent, and was 6.3 per cent lower than the same month last year.

The government collected taxes totalling Bt114.42 billion, due to the sagging economy and a cut in oil taxes.

Tax revenue in the first two months of the 2009 fiscal year (October and November) fell short of target by 10.7 per cent, ending at Bt201.9 billion – 12.8 per cent lower than the same period last year. (Nation)

I love when they mix “targets” with reality. Nobody give a rat shit about their “targets“, made by lunatics politicians and civil servants one year ago… It’s totally irrelevant.

What is important is : money that goes into the coffers.

The explanation given by Nation is a usual a little bit short. Totally short. Those guys are even unable to visit the official website of the Ministry of Finance.

The culprit is not only the lower taxes on oil (decided by Samak end of july for six months, read here). If we look at the details : almost everything is going down :

-VAT (-6,56 % compared to november 2007 !)
-tobacco, liquor, beer, car, battery… all the taxes related to consumption
-imports and exports duties, etc.

(report from the Ministry of Finance for november 2008, pardon them for their awful color taste… in yellow, the negative values)


The fall in VAT collections is a hard blow. Look at the chart… We had previously (from september 2004) only 2 months with a negative percentage of change y-o-y (may 2007 and september 2006)…


Personal tax and corporate are still displaying a positive % of change y-o-y. But for how long ? We all know that those taxes suffer from a time lag effect

VAT, exports duties are better indicators, because more real time.

Now ask yourself : is the situation going to improve ? Are the people going to consume more, boosted by some economic euphoria ?

Will the VAT collection increase ? Will the new Prime Minister have any margins to spend more, or to cut taxes…. ?

Thaksin must be smiling : with a worsening economy, his opponent, Abhisit The Hobbit and his “Frankenstein Coalition” are going to have a real hard time.

Stay tuned : monday, big day, the House should elect the new Prime Minister.

2 Responses to “Chart, tax revenue : -12,8 % compared to last year”

  1. 1 billdo 15 December 2008 at 6:27 am

    Export tax down a little over 14% already. Considering the job cuts and production slowdowns that the big companies have announced fairly recently, this number might be climbing in the near future and it does not bode well for their export driven economy.

    It was also interesting to see the drop in VAT, which according to the graph was only exceeded by the coup in September 2006. How much further will this decline in the next few months given the impact of the airport(s)closure?

    I’m curious if the PAD activities over the last six months, culminating with the closure of the airport being the final straw, will result in companies relocating or just closing all together. I guess it’s just a question of how many businesses will make this decision, not if they will.

    I spoke with an American businessman in Thailand last week who tried to sell me his stake in a business over there. I asked him why he was selling a business that six months ago, he was totally gung-ho about. His reply was: “it’s just too hard to do business over here and I’m tired of it. I’m going to China”.

  2. 2 ThaiCrisis 15 December 2008 at 6:49 am

    I’m not sure your friend would have it easier in China… ๐Ÿ˜‰

    As for the PAD… we start to see a trend in the press for instance : the blockade of the airport would be responsible for all the bad news coming from the economic front.

    I don’t buy it.

    Like in many other countries, without political crisis, we see that the tipping point was in october and november. The world in entering in a full blown recession. September was the symbolic tipping point (with Lehman in the US)… but october and november were the “practical” beginning.

    And for that matter, we shall repeat, over and over because people just don’t get it, we are only at the first steps of the crisis.

    However, I do agree that the political crisis in Thailand is worsening the situation. Without any stable government for instance, it’s impossible to launch the so call mega-projects.

    Will Abhisit be able to handle the situation ? I don’t believe it. At all. His “Frankenstein Coalition” will explode. He will have to make too many compromises. And he doesn’t have the charisma to “keep them quiet”.

    The old bosses are going to eat him, literaly. Without a spoon.

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.

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