Bangkok: Thammasat University academics have identified five critical limitations of the 2027 budget that are poised to hinder economic growth, urging the government to implement tax reforms and a bureaucratic overhaul.
According to Thai News Agency, the academics support the government's initiative to control expenditures and increase revenue through tax reforms and restructuring of the civil service.
Associate Professor Dr. Duangmani Laowakul from the Faculty of Economics at Thammasat University highlighted that the draft of the 2027 Budget Act, having passed its first reading, reveals several fiscal constraints. The budget shows a mere 0.2% increase, falling short of the projected 1% inflation rate. Recurring expenditures have grown significantly to occupy 73.6% of the total budget, making cuts challenging. Investment spending has decreased by over 70 billion baht from 2026, limiting infrastructure development funds. Despite a high budget deficit, revenue growth is slow, with borrowing for the deficit reaching 788 billion baht and loan repayments peaking at 151.2 billion baht in 2027. Technology development budgets remain procurement-focused, restricting research and innovation support.
Assoc. Prof. Dr. Duangmani stressed that without restructuring, Thailand risks remaining in the upper-middle-income trap. The uncertain private sector participation raises questions on investment incentives. The government must reform revenue collection and expenditure structures to boost economic prospects. Expanding the tax base, introducing new taxes, abolishing tax privileges, and considering VAT increases are suggested measures. Broadening asset taxes like inheritance tax is also recommended.
The scholar emphasized efficient tax management, noting that a broader tax base could reduce income tax rates. Dr. Duangmani also outlined seven areas for spending control, including Zero-Based Budgeting, prioritizing infrastructure and innovation, reforming budget allocation, utilizing digital tools in public services, and adjusting expenditures in line with Thailand's super-aging society. Decentralizing fiscal power to local governments is proposed to enhance budget efficiency.
The academics urge the government to take decisive action, balancing increased revenue with improved life quality to ensure public willingness to pay taxes.