July 28, 2008
Bangkok - Commerce ministry aims to propose 3% VAT to finance ministry in a hope to boost the purchasing power while the fiscal policy office expects the VAT reduction will lead to rising public debt.
Yanyong Phuangraj, director-general of the Internal Trade Department, revealed the department had measures to control the product prices based on diesel oil prices and inflation.
The measures are to help reduce people’s cost of living burden and maintain the inflation.
The average diesel oil price remained at 33 baht per litre during January-July 2008.
The inflation averagely hiked 6.3% in the first six months of this year.
35 product items are on the controlled product list.
Commerce ministry targets the inflation will be 5-5.5% this year. But it is possible the inflation will be higher than targeted.
The VAT cut will much affect the fiscal status as the government has to borrow loans. As a result, the public debt will certainly soar.
The private sector urged commerce and finance ministry to coordinate with each other more.
Rumor has it that former finance minister Veerapong Ramangura will take the finance minister post.
