Bangkok: The Senate Finance Subcommittee has expressed concerns over the projected revenue collection from three main government departments in 2025, anticipating that it will fall short of the target. This shortfall could lead to government deficits and borrowing difficulties, prompting recommendations for the government to plan the 2026 economy with caution and implement fiscal tightening measures.
According to Thai News Agency, Ms. Chanyanan Tiyatrakarnchai, a senator and chairwoman of the subcommittee on finance within the Senate Committee on Economic Affairs, Finance and Fiscal Affairs, highlighted these concerns while discussing the government's draft budget bill for fiscal year 2026. The House of Representatives is set to review this bill from May 28-31. The subcommittee had previously engaged with relevant agencies, including the Revenue Department, the Excise Department, and the Customs Department, to address worries about the budget bill, which has been active since October 2024. Ms. Chanyanan noted that despite the Revenue Department meeting its tax collection targets in the first half of the year, a drop in income and profits by 20-30% could lead to lower corporate income tax collections in the latter half. Additionally, household savings have dwindled, with over 80-90% of people holding only 1.5 months' worth of savings, resulting in reduced tax revenues.
The Excise Department is also facing challenges, having fallen short of its revenue target in the first half of the year. Projections indicate an even larger gap in the second half, with expected collections at 538 billion baht compared to a target of 610 billion baht. Similarly, the Customs Department is anticipated to collect less than its target. Collectively, these shortfalls could result in a revenue deficit of about 100 billion baht, approximately 3% of GDP, posing a significant risk to the national economy. The potential decrease in the country's income could exacerbate the deficit, necessitating increased borrowing and subsequently heightening public debt, despite limited borrowing capacity.
The chairman also pointed out additional risks, including a revised GDP growth forecast by the National Economic and Social Development Board (NESDB) to 1.8%, far below the anticipated 2.8-3.3%. Household debt, liquidity problems, and a declining agricultural economy further compound these risks. Particularly, the GDP from agriculture has dropped from over 700 billion baht to 500 billion baht due to falling global prices for key commodities like rice, rubber, and palm. The effects of US tax measures are also expected to have a full-year impact in 2026, especially affecting SMEs and entrepreneurs in sectors such as meat, beef, animal feed, and computer parts.
In light of these challenges, the subcommittee urged the government to adopt conservative planning and tighten the national budget by 3-4% to maintain stability. It stressed the importance of government intervention to support agricultural product prices and called for proactive measures to avoid negligence. Furthermore, the chairman advocated for reform and innovation in budget planning, citing the need for significant change since 70-80% of the annual budget is allocated to regular expenditures, with only 20% dedicated to projects and investments. The prime minister's central budget, amounting to 600 billion baht, is expected to play a crucial role in stimulating economic growth.