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Staff Column
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Thailand's Hot Populist Policy |
In terms of economic stimulation, we can’t deny that the government’s
Bt30-billion First Car Buyer scheme is probably the strongest automotive
policy since the industry started over 50 years ago.
All involved are benefiting from the scheme, whether it is the manufacturer
or buyer, who is enjoying the biggest government promotion ever for auto
purchase. Many think the scheme will help auto sales reach a historic 1.2
million units next year, and total auto production in Thailand would easily
reach 2 million units.
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But on the other hand, there are many questions raised from this auto tax rebate program. There are loopholes that can be made use of, and strict government supervision will be needed.
The government says that this is not a rebate for excise duty, but a rebate for the Bt30-billion fund to aid first car buyers. The rebates are simply calculated from the excise tax of each vehicle type.
The scheme is valid from September 16, 2011, to December 31, 2012. Those eligible are first time buyers who place orders on or after September 16, 2011, through to December 31 next year.
There is concern that the Yingluck government is not only offering heavy promotions for populist policies and promises made during her campaigning. There are many more including first home scheme, lowering the excise duty on diesel fuel from Bt5.31 per liter to just Bt0.005 per liter or price guarantee of rice grains ranging from Bt15,000-20,000 per ton. These projects will require huge funding, which is expected to reach as much as Bt300 to 400 billion.
As a result, the government will have to pour in huge sums of capital into the system. It hopes that with increased spending, government income from the proposed increase in Value Added Tax could also grow to as much as Bt245 billion.
Well, just wish that nothing happens to the country before prosperity begins.
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October 2011 |
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