Diesel tax cut will cost govt Bt17bn: Finance minister
Tuesday’s reduction in diesel excise tax will cost the government around Bt17 billion in lost revenue, according to Finance Minister Arkhom Termpittayapaisith.
Arkhom told reporters the Cabinet-approved cut of Bt3 per litre for three months would see Excise Department revenue drop by Bt5.7 billion per month.
The minister said the Bt3 cut would be applied to 100-per-cent diesel while the reduction for biodiesel would be calculated on its ratio of pure diesel.
The Energy Ministry would cap the retail price of diesel at Bt30 per litre until May, after which global oil prices are expected to ease, he said.
The government expects loss of fuel tax revenue to be offset by higher income from other taxes as the economy improves, he added.
Arkhom said the Oil Fund is currently facing liquidity issues as it transforms from a legal entity under the Energy Ministry to a public organisation. However, once the switch is completed, the fund will be able to borrow up to Bt3 billion to solve liquidity problems, he said.
Deputy Finance Minister Santi Promphat denied the tax cut was a result of political pressure, saying it was approved to ease people's burden from rising living costs.
Transport operators protesting the high cost of diesel had threatened to block Bangkok roads unless the price was reduced.
