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