Fiscal revenues : the fall continues and Abhisit’s admission

The figures about government’s revenues for february will be published this week (on Finance Ministry website).

I will then update the chart and write an new article.

Before that, we got an “appetizer” with this statement :

Finance Minister Korn Chatikavanij expected revenue shortfall of upto Bt150 billion or 10 per cent below target in the 2009 fiscal year, following the shortfalls in the first five months. [february is the fifth month of the fiscal year]

He attributed the shortfall to fewer economic activities as capacity usage is down to 57 per cent, compared to 70 per cent six months ago. This led to lower imports, which constituted a sizeable tax income. Meanwhile, a drop in oil prices would also lead to lower excise taxes.

He said it is necessary for the government to seek new revenue or borrow to finance projects.

“Despite lower revenue, I insist that the Revenue Department would not be pressured to squeeze business operators or individual for higher tax revenue. But we will consider levying other taxes and reduce the 2010 expenses. Meanwhile, we will borrow external loans, but the government’s deficit this year would not exceed Bt430 billion.” (Nation)

He has the figures for february (5 first months of fiscal year 2009, from october 1 2008 to september 30 2009).

He doesn’t say how much is the drop in february, compared to february 2008. He speaks for the whole year, with -10 % “below target “.

I wrote it many times : we don’t give a rat shit about “targets ” set by lunatics bureaucrats… who simply use linear functions (“we had a growth of 5 % last year, so Somchai put 5 % for the next year. With a little bit of luck, our target will be right”).

During crisis times, their “targets ” are meaningless. They are just totally outdated.

So stay tuned… it’s going to be important to follow the VAT collections with the evolution year on year (read my article : VAT collections plunge by 18 % in january).

VAT is a perfect indicator for consumption. With flat investments, negative exports, small increase of government spendings… consumption is the last “hope” (ah ah ah ah) of the thai government as far as growth of GDP is concerned (read my article about GDP Q4).

Last point : you can admire the non sensical way of thinking of Korn :

-no pressure on businesses and individuals, but we will create… new taxes.

-we will reduce expenses (well done Korn !) but meanwhile we are going to borrow.

This guy is, like all the others, a perfect clown.

And you can book it : the Abhisit government is in deep trouble… No money anymore. With stupid “hand out” policies plus a stupid will to downplay the crisis… the politicians and the bureaucrats are now totally naked.

Here is the proof :

Battered by the world economic meltdown which has also impacted the Thai economy, Prime Minister Abhisit Vejjajiva admitted on Monday that government’s revenue has declined lower than earlier targeted and warned there is need for the government to seek loans to help keep the economy rolling.

The government’s revenue in February is expected to fall considerably below the target due to declines both in imports and the prices of goods, the prime minister said. The Ministry of Finance continues planning how to cope with the range of economic problems, but the government has not borrowed internationally. (TNA)

Game over Abhisit.

4 Responses to “Fiscal revenues : the fall continues and Abhisit’s admission”

  1. 1 Bedwyr 10 March 2009 at 1:24 am

    Unfortnately this means we may need to batten down the hatches for a series of diversionary measures.

    More lese majeste (the last resort of the scoundrel is to wrap himself in the flag).

    More crackdowns on the red shirts

    More prosecutions of Thaksin

    More blaming Thaksi

    More paranoia about Thaksin returning to overthrow the palace.

    More about wicked foreigners, probably combined with new visa regulations at the drop of a hat.

    The emperor hath n clothes and I think it will get ugly as he tries to stop people noticing. In a real sense, I think the coincidence of timing of Thaksin having to decampo and the onset of the financial crisis are actually going to work together. All we need – in about 1 year (when things are really shite) is for someone to die.


  2. 2 ThaiCrisis 10 March 2009 at 5:09 am

    Unfortunately… yes I believe we will get a little bit of this, a little bit of that. In crisis times, the scheme is always the same : people need to find culprits.
    The smart politicians know this and will give them a few.

    But… It’s not a thai exclusivity… The same will happen in several countries.

  3. 3 Prokster 10 March 2009 at 5:11 am

    Maybe they should start to get creative like a number of State governments in the US. Legalise and tax weed, hookers…gambling, provincial lotteries….
    I think they should do something radical like take a 5 baht / litre (rescue Thailand) tax on petrol / deisel.
    They have no hope of increasing VAT returns anytime soon, ditto corporate and income tax.

  4. 4 George P Tuckeer 11 March 2009 at 12:25 am

    @ Prokster

    Re: petrol tax: perhaps TC could confirm this, but I think the government already implemented this and are currently collecting something like a 3 Bht petrol tax?

    Legalizing weed and prostitution would be a REALLY good idea, but in Thailand it’s never gonna happen. What would they do with all the excess hypocrisy then?

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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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