Thai Finance Ministry Elated By Rocketing Tax Collection

[webfact]

Finance Ministry elated by rocketing tax collection

By Digital Media

BANGKOK, Dec 22 – Thailand’s revenue from tax collection in the first two months of the 2013 fiscal year, or October-November, reached Bt321.2 billion, or 8.5 percent higher than the target, mainly due to the government’s policy of tax refunds for first-car owners, the Finance Ministry announced.

Somchai Sujjapongse, director general of the Fiscal Policy Office, said the collection of excise tax from first-car purchase was Bt5.89 billion or 58.3 per cent higher than expected, while the expansion of domestic consumption has contributed to Bt5.66 billion or a 10.2 percent increase in the collection of value added tax (VAT) from the original target.

Revenue from the government sector was Bt4.1 billion higher than targeted, while state enterprises contributed Bt1.8 billion more than anticipated.

Mr Somchai said the state coffer also received Bt1.65 billion from the National Broadcasting and Telecommunications Commission and Bt1.95 billion from the Communications Authority of Thailand or CAT Telecom.

The Finance Ministry received revenue from CAT Telecom much earlier than the expected delivery of May next year, he said.

He said the country’s economic growth and the positive signals of global economic recovery have boosted the Finance Ministry’s confidence in achieving the targeted tax collection of Bt2.1 trillion for the 2013 budget year. (MCOT online news)

-- TNA 2012-12-22

[Thait Spot]

They are counting revenue that will need to be paid out again. This should be accrued. Not doing so provides a false record.

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Edited December 22, 2012 by webfact
/OP deleted //no need to quote OP in post #2

[siampolee]

Does this unexpected surge in tax payments mean that the Thaksin tribe have actually paid their taxes at last?

Edited December 22, 2012 by siampolee

[bigbamboo]

No wonder the government is elated. That's lots of extra money for them to spend.

Christmas really has come early this year!

[noitom]

Thailand’s revenue from tax collection in the first two months of the 2013 fiscal year, or October-November, reached Bt321.2 billion, or 8.5 percent higher than the target, mainly due to the government’s policy of tax refunds for first-car owners, the Finance Ministry announced.

How can tax collections increase mainly due to "refunds?" It doesn't make sense.

[Thait Spot]

Thailand’s revenue from tax collection in the first two months of the 2013 fiscal year, or October-November, reached Bt321.2 billion, or 8.5 percent higher than the target, mainly due to the government’s policy of tax refunds for first-car owners, the Finance Ministry announced.

How can tax collections increase mainly due to "refunds?" It doesn't make sense.

I took it to mean that the manufacturers have sold many more cars than forecast due to the tax break. However that tax will be paid out and therefore should not be counted.

Positively Orwellian

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[MaxLee]

If the sales of cars and their first car policy is considers a success, welcome to another white lie of Kirtirat

[pedro01]

Thailand's revenue from tax collection in the first two months of the 2013 fiscal year, or October-November, reached Bt321.2 billion, or 8.5 percent higher than the target, mainly due to the government's policy of tax refunds for first-car owners, the Finance Ministry announced.

How can tax collections increase mainly due to "refunds?" It doesn't make sense.

I took it to mean that the manufacturers have sold many more cars than forecast due to the tax break. However that tax will be paid out and therefore should not be counted.

Positively Orwellian

Sent from my Nexus 7 using Thaivisa Connect App

Is the rebate scheme paying out 100% of car excise or juts a portion of it?

[Thait Spot]

Thailand's revenue from tax collection in the first two months of the 2013 fiscal year, or October-November, reached Bt321.2 billion, or 8.5 percent higher than the target, mainly due to the government's policy of tax refunds for first-car owners, the Finance Ministry announced.

How can tax collections increase mainly due to "refunds?" It doesn't make sense.

I took it to mean that the manufacturers have sold many more cars than forecast due to the tax break. However that tax will be paid out and therefore should not be counted.

Positively Orwellian

Sent from my Nexus 7 using Thaivisa Connect App

Is the rebate scheme paying out 100% of car excise or juts a portion of it?

I believe it is limited to cars constructed here, to first time buyers, and has a limit.

My wife bought a car for around 650k and will receive a reimbursement of 100k. Pickups are taxed less and will have less rebate.

The interesting proviso on the scheme is that you have to keep the car for 5 years or you need to pay the tax back. Quite what will happen to defaulters will become clear soon but if they lose their jobs, cannot pay the loan and have received their rebate then they will be up pooh creek.

A bit like the previous finance schemes under Thaksin, those in debt will either sell their land or offer the chanot as collateral. The rich will thus buy more land and increase their wealth and the poor will think that the PTP helped them in some way.

Sent from my Nexus 7 using Thaivisa Connect App

[whybother]

They expect to pay out 73 billion baht for the tax refunds on the cars. The 6 billion extra they collected on the excise tac won't go very far.

Sent from my HTC phone.

[rubl]

[quot]while the expansion of domestic consumption has contributed to Bt5.66 billion or a 10.2 percent increase in the collection of value added tax (VAT)[/quot]

Any one with an idea whether this is due to higher consumption by Thai people, or just a 10% increase in line with lots of common goods having seen price increases? Remember some may not (need to) pay income tax, but ALL are hurt by VAT.

[ianf]

[quot]while the expansion of domestic consumption has contributed to Bt5.66 billion or a 10.2 percent increase in the collection of value added tax (VAT)[/quot]

Any one with an idea whether this is due to higher consumption by Thai people, or just a 10% increase in line with lots of common goods having seen price increases? Remember some may not (need to) pay income tax, but ALL are hurt by VAT.

Perhaps there is more false tax collection going on. Today I had a shipment of books (vale 3600 baht) from the UK and I was charged 2268 baht tax. Now I have to try and extract this money from UPS or someone ..... but I am sure there is some pressure on customs to add to the tax pile.

[otherstuff1957]

It would be interesting to see an actual analysis of the rebate vs. excise taxes collected.... but I just don't think that the reporters at either the Nation or the Post are up to such a thing!

Here's my best estimate: Current excise tax rates for new cars produced in Thailand ranges from 30% to 50%. Now let's say that the base cost for a new eco car is about 300,000 baht. 30% more would take us up to 390K, say 400k for convenience sake. Then the new buyer gets up to 100K back after the 1st year. In this case the government revenue will net to zero.

Now, let's look at a more expensive car that costs 600K to produce. If this car is in the 50% tax bracket, the excise tax will be about 300K, giving us a total of 900K. In this case, the government will actually make some money, as they will have a net income of 200K.

The real question is, would these cars have sold anyway? If so, the government has given away billions of baht for nothing.

[Ricardo]

Of course none of those purchases were from next year or year after, pulled forwards to take advantage of the tax-break, and resulting in lower sales & tax-collections over the next couple of years, or were they ?

[Rinrada]

UK and Germany did the same thing re cars a couple of years ago and went down quite well.

Heard a whisper that there may be an even better offer from the T Government next year with 200,000 Bt off a car/pickup....but just a.......now that world is back to normal...why not..could be ...

[cheeryble]

: Current excise tax rates for new cars produced in Thailand ranges from 30% to 50%. .

Isn't 30 to 50% rather enormous for a non-import?

Edited December 22, 2012 by cheeryble

[Pib]

I heard on a TV news report the amount of tax collected through vehicle sales will all be paid back out and also will not be enough to cover the rebates; therefore, the additional amount needed will come from the central budget (i.e., borrowed money). So yea, taxes collections are UP due to vehicle sales, but not enough to cover what must be paid back out. I guess that fine print info was going to be covered in a later press release (or not).

Edited December 22, 2012 by Pib

[hansnl]

Thailand’s revenue from tax collection in the first two months of the 2013 fiscal year, or October-November, reached Bt321.2 billion, or 8.5 percent higher than the target, mainly due to the government’s policy of tax refunds for first-car owners, the Finance Ministry announced.

How can tax collections increase mainly due to "refunds?" It doesn't make sense.

The tax rebate on the cars and trucks is, in fact, only a reduction of the amount of tax on the sales price of the vehicle.

Plus additional tax revenue from using the new cars and trucks.:

Plus extra tax revenue from the finance companies.

Edited December 22, 2012 by hansnl

[hansnl]

[quot]while the expansion of domestic consumption has contributed to Bt5.66 billion or a 10.2 percent increase in the collection of value added tax (VAT)[/quot]

Any one with an idea whether this is due to higher consumption by Thai people, or just a 10% increase in line with lots of common goods having seen price increases? Remember some may not (need to) pay income tax, but ALL are hurt by VAT.

Perhaps there is more false tax collection going on. Today I had a shipment of books (vale 3600 baht) from the UK and I was charged 2268 baht tax. Now I have to try and extract this money from UPS or someone ..... but I am sure there is some pressure on customs to add to the tax pile.

On books there should only be VAT @ 7% on the price of the books plus transport.

And if I read it well, study books are VAT free.

I never paid any penny on imported books.

From the UK or Germany, but alway with the normal mail.

I do understand that the custom agent (UPS in this case) gets a percentage of the tax collected.

Enough said

[ratcatcher]

"Finance Ministry elated by rocketing tax collection"

Once again this image comes to mind.

[chainarong]

The exploding tax I'd call it, they just stuck another million gas gobbling cars on the road and they are rubbing their hands with glee,,lets think about it , anyone who needs a tax break from a Gov to buy something, can't afford it in the first place, health , air pollution, more accidents, the knock down effect, so where did we actually save, the baht is going in one door and out the other, around in circles

[Ricardo]

UK and Germany did the same thing re cars a couple of years ago and went down quite well.

Heard a whisper that there may be an even better offer from the T Government next year with 200,000 Bt off a car/pickup....but just a.......now that world is back to normal...why not..could be ...

Not sure about the UK-offer, but didn't the German one include, that you had to trade-in or scrap an old 'clunker', to get the deal ?

So that really was a plan, to get the oldest/worst cars off-the-road, unlike the PTP-scheme which didn't include that provision. Indeed logically, if you had to be a first-time buyer to benefit, then you wouldn't have a previous/old car (in your name) to trade-in ?

And if the discount/rebate for 2013 had to be doubled/increased, from the 2012 scheme, wouldn't that mean admitting that many 2013-sales had been pulled-forward by the 2012-scheme, and an even-larger inducement was now needed, merely to keep car-sales at relatively-normal levels ?

I wonder what the car-industry might prefer, a bumper-year (to coin a phrase ) followed by a few shortfall-years, or steady/even consumption/production which gives them the option to match supply & production-capacity more-closely to longer-run demand, in a market not-distorted by one-off tax-gimmicks/rebates ?

Edited December 23, 2012 by Ricardo

[lomatopo]

I think the bulk of the increase comes from increased VAT, 3G auction, income tax with-holding, fees.

The increase in vehicle tax collected was only 2.17 billion, on a net increase of 25.16 billion so ~ 8.6%.