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Strong baht dampens revenue collection

Strong baht dampens revenue collection

The Finance Ministry’s revenue collection for the 2007 fiscal year is slightly higher than originally projected, as the stronger baht and political uncertainties have affected local consumption and investment, according to Permanent Secretary for Finance Suparut Kawatkul.
He said the government’s revenue earned for fiscal 2007 (October 2006-September 2007) totaled Bt1.45 trillion, up only Bt25.6 billion from the projection of Bt1.42 trillion and a rise of Bt105.91 billion from the revenue collected in the previous fiscal year.
He said taxes collected from employment totaled Bt14.57 billion, up 8 per cent from that of the previous year, and those earned from trade increased 5.9 per cent, which remains sound.
Factors that had negative impacts on the revenue collection this year include the stronger baht, political uncertainties, and high interest rates.
They had affected the investment and consumption, particularly of durable goods.
The baht appreciation had reduced the baht-denomination imports by 4.2 per cent although the import volume increased by 3.4 per cent. But it had raised the baht-term imports by 6.3 per cent.
He said the government set a revenue target for the 2008 fiscal year of Bt1.49 trillion, up 6.1 per cent from that of the previous year.
He believed the revenue collection for fiscal 2008 should not encounter any problem because the country’s economy is expected to expand 5 per cent next year with an inflation rate of 3 per cent.
In addition, various risk factors in fiscal 2007 - including political and economic woes - had eased, which could lead to a restoration of confidence among consumers and investors.
As of the end of fiscal 2007, the country’s fiscal coffer stood at Bt132.14 billion, up Bt2.8 billion from that of the previous year, which is sufficient for the management of costs. TNA