Sin taxes : the gvt gives 20 billions… then takes back 20 billions

Beginning april, Abhisit gave his “national bribe” (sorry “special allowance”) : 2000 THB for people with a salary lower than 15 000 THB per month… Total budget : around 20 billions.

It was his grand scheme, the stimulus, the Dildo Economy. He was confident that this fart -from a macro economy point of view- would start up the economy by injecting cash. And then he wanted to borrow 1400 billions THB… Abhisit went orbital.

A few weeks later… the reality principle… AKA laws of gravity… are striking back. Coffers empty. Tax collections down. Expenses up. Reduced capacities of borrowing…

Result : Abhisit is falling. Back on earth. And it’s painful.

This is why the government decides now to increase the so called “sin taxes” (on alcohol and cigarettes), before to increase the taxes on fuel !

The government is preparing an executive degree to sharply increase the excise rate ceilings on cigarettes and fuel as it struggles to cope with a revenue shortfall. The move comes after a 5-7-per-cent tax hike in alcohol products.

Deputy Finance Minister Pruttichai Damrongrat said more tax revenues were needed to finance public investment schemes.

Altogether, the planned tax hikes will lead to an additional revenue of Bt20 billion per annum on cigarettes and alcoholic beverages while another Bt55 billion will be generated by the Bt2-per-litre tax hike for petrol and diesel. (Nation)

So let’s make a quick calculation : 20 billions minus 20 billions… equals ? ZERO.

Zero like the number of neurons those clowns have inside their brain.

Zero like the effect of those U-turns on the state of the economy : the Dildo is seriously downsized. 😉

The whole Abhisit’s administration is a disgrace as far as economy management is concerned.

They are a bunch of amateurs.

22 Responses to “Sin taxes : the gvt gives 20 billions… then takes back 20 billions”


  1. 1 absolutelybangkok 8 May 2009 at 3:15 pm

    Lovely, what a scam!

  2. 2 Marvo 8 May 2009 at 5:04 pm

    That’s a 20 billion baht extra tax revenue PER ANNUM!

    The “bozos” give the great unwashed their 20 mil as a “one-off” bribe to popularity and then discretely suck 20 mil back YEAR AFTER YEAR. Maybe they’re not so stupid after all 😉

  3. 3 fall 8 May 2009 at 7:01 pm

    Well, as a Buddhist country. They manage to gain revenue and deter an addiction in one stone.
    But the fuel tax is what bothers me. The idea that government is so broke that it must tax an essential good.

    I have a feeling Economics 101 just gone out the window for these guys…

  4. 4 Lothar 8 May 2009 at 10:22 pm

    It might also be good for moral to take from the sin addicted and give it to the poor.

    My only critic here is that not everybody below 15000B got the 2000B – very very few in Mae Hong Son Province got it. So they should have raised the tax a little more.

    And Marvo is right that you can be damned sure that this tax increase is not going away soon.

  5. 5 ThaiCrisis 8 May 2009 at 11:39 pm

    Fuel is indeed the weak point… I wrote several articles about this issue (energy efficiency, imports etc.)

    You’ll notice that Abhisit has created a new concept : the tax hike… that people won’t feel ! At least, this is what the alleged Prime Minister is saying. 😉

    The government’s plan to raise the excise tax on fuel would not mean price increases at the pumps, Prime Minister Abhisit Vejjajiva claimed on Friday.

    He said the Ministry of Energy and the Oil Fund had discussed this issue.

    They were clear on the matter, affirming that retail oil prices would not be increased should the excise tax be raised. (Bangkok Post)

    It makes no sense at all of course ! But mai pen rai.

    Anyway, oil prices seem to increase again… That could be the last blow to Abhisit and the thai economy.

    We have to remember that last summer, during Peak Oil Prices, we were very close to disaster… Very close… The Samak gvt spent an insane amout of money to subsidize prices at the pumps…

  6. 6 fall 9 May 2009 at 12:00 am

    The government’s plan to raise the excise tax on fuel would not mean price increases at the pumps, Prime Minister Abhisit Vejjajiva claimed on Friday.

    There is no such things as free lunch, didn’t they teach that at Oxford? He has not yet top-up Bush on the idiotic scale, but definitely trying hard…

  7. 7 Jeffrey 9 May 2009 at 7:09 am

    TC; Have there been concurrent tax hikes on property, income derived from real estate development and rentals?.
    If not, may that be related to who it is that actually holds so much land in Thailand?.

  8. 8 George P Tuckeer 9 May 2009 at 8:08 am

    Lower oil prices encourage waste, therefore higher prices make sense IF it leads to conservation. Sensible consumption taxes can be (but haven’t been) imposed so as to minimize effects on those least likely to afford it. e.g. the government can impose punitive tax on less fuel efficient vehicles and appliances, even houses. They can tax residential electricity consumption over a certain cap, ditto with water consumption. The majority would not suffer and would not complain. A well-connected vociferous minority would scream bloody murder. Oh, wait, I see why such taxation has not been implemented.

  9. 9 Bedwyr 9 May 2009 at 8:18 am

    @TC:

    The government’s plan to raise the excise tax on fuel would not mean price increases at the pumps, Prime Minister Abhisit Vejjajiva claimed on Friday.

    Yes, I thought that was quite sweet as well. Sort of denying gravity really.

    Perhaps Abhisit will be right, after all, perhaps the petrochemical industry will indeed say: “Right boys, its a fair cop, we have to do our bit for the country so we will pay the extra excise and not pass it on to our Thai brothers and sisters whom we love so much as Pa Prem righty says. So the new Benz can wait until the economy is better. For the good of the country”.

    And the caterpillar smoked his hookah and the Red Queen said “Faster”, and all was well in wonderland.

    Pass me another joint.

    Bedwyr

  10. 10 InPhuket 9 May 2009 at 10:36 am

    TC: This deserves a write-up, in your ever-so-special way:

    Jet purchase plan shelved by air force

    http://www.bangkokpost.com/news/local/16383/jet-purchase-plan-shelved-by-air-force

    My favorite line from an Air Force clown is “We must explain what is essential and need a review from the government. Weapons result in national security. Without strong defences, neighbours will not have respect for us.”

  11. 11 Marvo 9 May 2009 at 10:53 am

    This week they increase taxes on fuel, next week they’ll subsidize it again….yaaaaaawwwwn.

  12. 12 Tarrin 9 May 2009 at 2:09 pm

    Can someone contact Oxford and reaffirm them that Abhisit was actually graduate from their respectable institution. If they confirm as such please tell them to check Abhisit obtain the diploma without cheating.

  13. 13 John 9 May 2009 at 2:44 pm

    So the Calculating Citizen takes his 2000 baht and buys cigarettes before the tax increase, which is good for the economy of ……. (some other countries).

  14. 14 antipadshist 9 May 2009 at 6:13 pm

    somehow I still think that Abhisit is not such a clown as he appears to be. yes, his actions and words make him look like a clown.

    but …

    may be it was designed so?

    because WHO is the real loser in the end? 😉
    NOT Abhisit / Korn and his Dems buddies (and their patrons in CP, big banks etc) – it is …. TAXPAYERS, the sheeple !
    because ultimately it is ordinary folks (BTW including that very middle class who so ferociously supported Abhisit) who lose money – NOT all the elite and certainly NOT Abhisit or especially Korn!

    I bet that Korn has devised many scheme to ensure that he, his buddy Abhish1t and others would stuff their pockets to outmost, while they are still enjoying playing government game.

    as for “government coffers” – it is just an insignificant thing for them !

  15. 15 siamnilsson 11 May 2009 at 1:44 pm

    Hi,

    Well written by you, but it’s not a “Zero-sum” game – It’s a one billion bath game!

    Didn’t you see that there was “someone” who benefited extremely well from the 2000-bath allowance scheme?

    According to “The Nation” they (the government) handed out 18 billion bath, but the cost for handing out the money was 19 billion bath.
    Who got that 1 billion ?

    2000 bath multiply with 9 million people = 18 billion !

    “Thailand’s Bt19-billion cash-handout measure, part of the Bt117-billion economic stimulus programme, is similar. The first batch of these Bt2,000 gift cheques is due to reach the pockets of 9 million low-income earners on March 26.”

    http://www.nationmultimedia.com/search/read.php?newsid=30096851&keyword=Government+spending

    Mr Nilsson in Sweden

  16. 17 observer 11 May 2009 at 8:54 pm

    To day, The Nation publish the great news that health minisry request Bt 80 miljon to buy raw materials to produce the antiviral drug Osaltamivir to treat people with the deadly influenza H1N1. They intend to produce 2 miljon tablets.
    Here are some comments:

    The virus is very mild, and for people with ordinary health it´s not letal.

    The drug is available without problem on the legal market.

    As you need 10 tablets for each indvidual, you can treat 200 000 patients for this amount.

    Now, the GPO (with Abhisit interest) is said to produce the drug for 40Bt/tablet!! So this must surely be a cheeper way to resolve the problem. So why the health ministry ask for 80 Milj Bt??

    May be it is an emergency exit if the rest of the world
    would accuse the Thai government of violating IPR rules.
    The truth is more likely that this money will be used for the quack, quack clowns who boost their pockets without any concern to the Thai people.

  17. 18 antipadshist 12 May 2009 at 8:21 pm

    here is a “BIG secret” which is somehow apparently not a secret :

    ‘Stealth’ budget up for approval
    Tomorrow’s Cabinet meeting is expected to endorse a Bt157.5 million secret stealth budget including Bt25 million for spying on the red-shirted protest group, a government source said yesterday.
    http://www.nationmultimedia.com/2009/05/12/politics/politics_30102432.php

  18. 19 antipadshist 12 May 2009 at 8:24 pm

    TC

    here is fitting pic for this your post :

  19. 20 Tarrin 13 May 2009 at 6:10 am

    One point I want to make,

    You increase tax = higher price = lower demand = lower tax revenue.

    There are so many research papers that written about higher tax rate actually can lead to lower tax collect, for example, when the Australian introduced VAT which made their consumption take a deep dive for several years. And another case which I’m not recall which country but I think its Mexico where they increase corporate income tax that lead to a deep decline in FDI and thus fewer tax revenue.

  20. 21 Mike 14 May 2009 at 11:03 am

    What do you prefer? A rise in taxes on alcohol, tobacco and fuel, or thousands of extrajudicial killings, military suppression of Muslims in the South, and the raping of Thailand to the tune of 73 billion baht? Or, as it seems with the majority of Thais, do you not give a damn about human rights and corruption as long as you’re getting your 500 baht handout from the red-shirt cronies at the voting booth?

    Abhisit is one of the only decent and intelligent politicians Thailand has; he is ultimately good for the country. So, wake up, smell the coffee, stop your belly-aching and let the man do his job.

  21. 22 ThaiCrisis 14 May 2009 at 1:30 pm

    Everything is relative. Compared to the clowns (and the murderers) in uniforms, and other professionnal monsters like Samak, it’s clear that Abhisit is like the Virgin Mary with golden panties.

    But, let’s be clear. If you assume that Abhisit is “doing the job”, then you’re making a serious mistake. Abhisit is a cardboard, the mayor of the Potemkin Village.

    The way he was “elected” PM, the recent events… are the proof that he doesn’t control much.

    Furthermore, your kind of rethoric where you mix oranges (fiscal policy) and bananas (extrajudicial killings)… is really cheap and does not contribute to increase the level of the debate.

    It’s the old trick : what do you prefer ? Cholera or AIDS ? It’s meaningless.


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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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