The Thai economy is expected to expand at a pace close to 4% this year, but whether it will reach its growth potential depends on private and local administration investment demand.
Investment from the private sector and local administrations that have a combined budget surplus of 100 billion baht are needed to push economic growth to 4%, said Somchai Sujjapongse, permanent secretary for finance.
The Finance Ministry's review of its economic growth forecast is set to take place later this month. The ministry's think tank predicts Thailand's GDP and exports this year will expand by 3.6% and 4.9%, respectively.
The Bank of Thailand late last month raised its forecast for the country's GDP growth to 3.8% this year, up from 3.5%. The central bank predicts 3.8% growth for 2018, up from 3.7%. The bank also increased its export growth forecast for this year and next to 8% and 3.2%, from 5% and 1.7%, respectively.
The Finance Ministry's economic stimulus measures have focused on driving growth in provincial areas, he said, adding that it has asked the Interior Ministry to promote local investment.
Separately, Mr Somchai said that there had been no progress on the Tourist Authority of Thailand's proposed tax breaks for travelling expenses, and the ministry wanted to allow only travel expenses incurred in secondary provinces to be deductible from taxable income.
Major provinces including Chiang Mai and Phuket are the main tourist destinations, which do not need the government's tax incentives, he said.
The Finance Ministry wants to offer tax breaks on travel expenses incurred from community-based tourist spots where tourism numbers remain low, he said.
In August, tourism officials floated the idea of a personal tax deduction of 15,000-50,000 baht for domestic travel expenses, depending on the areas visited, but the Finance Ministry baulked at the idea. The TAT has said that it will likely reconsider the issue in early 2018.
For tax breaks on shopping, Mr Somchai said it depended on Finance Minister Apisak Tantivorawong's decision on whether the measure is still necessary. But Mr Somchai said he personally thought Thailand's economic growth is picking up and if the government wants to stimulate the economy, provincial areas should be the focus.
The government last year offered shopping tax incentives, which allowed each individual taxpayer to deduct the value of domestic purchases of goods and services worth up to 15,000 baht. That was the second straight year the scheme, intended to boost domestic consumption, was made available.
Meanwhile, he said that tax collection efficiency at the three departments would be increased following the adoption of an electronic system. The Finance Ministry's plan to implement an e-commerce tax this fiscal year would help raise the taxpayer base, said Mr Somchai. At present, a mere 6-7 million people are liable for personal income tax.
For the 2018 fiscal year, the Revenue Department aims to collect 1.93 trillion baht, the Excise Department 600 billion and the Customs Department 110 billion.
