Macroeconomics/Oil excise tax

Chatrudee Theparat

The government has given the greenlight to extend other two months for a reduction of five baht for diesel oil excise tax.

The cabinet endorsed an extension for two months to reduce five baht for diesel oil excise tax from November 21 to January 2023.

Finance Minister Arkhom Termpittayapaisith said the extension of diesel oil reduction program is aimed to alleviate people and businesses which are affected by oil price fluctuation. The previous relief measure will be expired this November 20.

The Excise Department reported the cabinet that crude oil price remains to face fluctuation and likely to increase due to the coming winter season which would drive the energy demand, which would hit the cost of oil imports and domestic retail price.

The ministry estimated that the fifth excise tax reduction would lead the government to lose 20 billion baht in revenue. The government expected to lose its total revenue of 108 billion baht from the launch of diesel oil tax reduction scheme for 5 times.

So far, loss from reducing excise tax of diesel oil for four times totaled 88 billion baht. Looking into details, the first time of such a reduction took place between February 18 and May 20, 2022, with a three-month period, caused a revenue loss of 180 billion baht, following 30 billion baht loss from May 21 to July 20 with a reduction of five baht of oil excise tax, and 20 billion baht loss from July 21 to September 20 with five baht reduction, and 20 billion baht loss from September 21 to November 20 with five baht reduction.

In a separate development, Deputy Prime minister and Commerce Minister Jurin Laksanawisit said the cabinet approved the rice insurance scheme with 81.2 billion baht budget. The scheme will be implemented as the fourth year, covering 4.68 million families. The government plans to pay the first amount of the scheme to farmers this November 22.

He said the price guarantee scheme for palm, maize and tapioca, the government does not pay a gap price because the market prices are higher than benchmark prices.