FIRST CAR POLICY. The policy is to refund excise tax of maximum Bt. 100,000 to people who buy their first car of maximum 1,500 cc. or pick-up or double cap truck locally assembled. Buyers will get tax refund after 12 months of purchase. After one month of implementation, great flood swept across the central region where most vehicle industry locate so the buying period extended from 31st December 2011 to 31st December 2012, for the purchase order, while the delivery can be extended indefinitely.
The policy was overwhelmed and beyond anticipation. At 31st December, there were more 1.3 million first car-buyers entitled to get tax refund. The number was exceeded than the estimated 500,000 units, therefore, the Excise Department must seek an extra budget to cover the surplus expenditure.
On May, the World Bank warned that the government should reconsider populist policies which were high-cost-low-return such as rice-pledging program, one tablet PCs per student etc. since they cost 3% of the national budget and a loss of 1.5 % to 2012 GDP. The Deputy Prime Minister and Finance Minister, Kittirat Na Ranong, argued these policies are not only about giving money but they empowered the people to think about and solve their own problems. When people pay less tax they have more money to spend on goods. However, on October, he seemed to realize that these populist policies put enormous burden to financial balance.
FIRST CAR POLICY. The policy is to refund excise tax of maximum Bt. 100,000 to people who buy their first car of maximum 1,500 cc. or pick-up or double cap truck locally assembled. Buyers will get tax refund after 12 months of purchase. After one month of implementation, great flood swept across the central region where most vehicle industry locate so the buying period extended from 31st December 2011 to 31st December 2012, for the purchase order, while the delivery can be extended indefinitely.
The policy was overwhelmed and beyond anticipation. At 31st December, there were more 1.3 million first car-buyers entitled to get tax refund. The number was exceeded than the estimated 500,000 units, therefore, the Excise Department must seek an extra budget to cover the surplus expenditure.
On May, the World Bank warned that the government should reconsider populist policies which were high-cost-low-return such as rice-pledging program, one tablet PCs per student etc. since they cost 3% of the national budget and a loss of 1.5 % to 2012 GDP. The Deputy Prime Minister and Finance Minister, Kittirat Na Ranong, argued these policies are not only about giving money but they empowered the people to think about and solve their own problems. When people pay less tax they have more money to spend on goods. However, on October, he seemed to realize that these populist policies put enormous burden to financial balance.
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