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Diesel tax cut ‘will not affect government deficit’

Diesel tax cut ‘will not affect government deficit’

Naris Chaiyasoot, Director-General of the Fiscal Policy Office (FPO), has expressed confidence that the government’s cuts to the excise tax on Diesel, aimed at capping diesel prices at below B30 a litre or less, will not affect the country’s fiscal position.

Saturday 28 May 2011, 03:04AM

Announcing the fiscal position in the first seven months of fiscal 2011, he said the government managed to put B916.24 billion into state coffers, up B67.29 billion or 7.9 per cent from the same period the year before.

The revenue collection by three state agencies responsible for taxation had surged due to continued economic growth.

In the same period, budget disbursement by the government totaled B1.29 trillion, up B219.33 billion, or 20.3 per cent, from the corresponding period last year.

This resulted in a budget deficit of B382.63 billion. The figure, when combined with the off-budget deficit of B61.08 billion arising from the fiscal bill redemption, put the balance of cash in deficit at B443.71 billion.

The government borrowed B129.61 billion, reducing the deficit to B314.11 billion, and resulting in the treasury cash balance standing at B115.21 billion at the end of April.

Mr Naris said the FPO was confident that the diesel tax reduction would not have a negative effect on fiscal position, thanks to the improved economic situation and the strength of Thailand’s fiscal position.

As at the end of fiscal 2011, he predicted, the treasury cash balance would remain at around B300 billion, which is considered a “stable position”.

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