Thaksin and Pheu Thai Party face constitutional showdown

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FINANCE

Korn to propose new public debt plan

By Piyanart Srivalo

The Nation

The Cabinet will tomorrow consider the Finance Ministry's request to lift public debts and the Tourism and Sports Ministry's proposal to turn Thailand into an international film-making destination.

Finance Minister Korn Chatikanij will propose a revised public debt management plan to the Cabinet tomorrow, an informed source said last week.

The Public Management Office will increase its management portfolio to Bt1.7 trillion from the previous target of Bt1.65 trillion. The domestic borrowing ceiling will be raised by Bt42 billion to Bt720.6 billion, as the fiscal reserves will be used for early redemption of bills of exchange worth Bt42 billion.

Thanks to higher-than-expected revenue, the fiscal reserves at the end of 2010 fiscal year will be Bt347.4 billion.

The ministry also plans to increase its foreign borrowing by Bt22.78 billion, in addition to the Bt99.94 billion previously planned. The new borrowing will finance extension of the Red Line mass transit train by the State Railways of Thailand. The ministry had signed loan con?tracts for 63.02 billion yen (Bt23.2 billion) with the Japan International Cooperation Agency in March.

Commerce Minister Porntiva Nakasai will also report to the Cabinet about her discussions with Japan's minister of economy, trade and industry last month. Her counterpart had expressed concern about the lack of progress in reducing car taxes. Japan has urged Thailand to lower the tax on big cars with engine capacity of 3,000cc and up.

On the Tourism and Sports' proposal, filmmaking in Thailand should be entitled to 100 per cent value-added tax refund, zero income taxes on foreign actors, a cut in shooting equipment import tariffs, and the cancellation on movie films. This follows the proposal of a committee chaired by the ministry's permanent secretary and representatives from the private sector. The filmmakers will also win tax credits, 15-20 per cent of all paid taxes, which would be returned when they return for a new film making.

The committee suggested that the tax incentives would strengthen Thailand's potential as a shooting location, with sufficient resources. The incentives are designed to make Thailand attractive to both existing and new filmmakers. All taxes paid account for 10 per cent of total investment, while VAT is only 3-5 per cent. The cuts and abolition would not affect the government revenue, while the Revenue Department can collect more indirect taxes, the committee said.

-- The Nation 2010-08-23