VAT hikes alone won't narrow deficit
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The negative income tax concept was proposed by the Fiscal Policy Office a decade ago.
This article is not meant to attack Finance Minister Ekniti Nitithanprapas's Medium-Term Fiscal Framework (MTFF) for FY2026-FY2030. It is meant to emphasise the fragility of a Thai fiscal position that requires multiple revenue enhancement measures.
The MTFF is much talked about because it includes a VAT hike of 1.5% in FY2028 and another 1.5% hike in FY2030. But VAT increases do not seem to be enough to narrow fiscal deficits to the required level of below 3% of GDP. Another tax increase measure is required for FY2029.
My guess from the size of the revenue increase in FY2029, it is likely to be a petrol tax hike of 2 baht per litre, bringing in additional revenue of 87 billion baht. If my guessing is incorrect, the government should explain why fiscal revenue is projected to rise by 4.1%
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