Thai Finance Ministry Seeks to Contain Revenue Shortfall Amid Slower GDP Growth
FY2025 revenue projections under pressure as actual economic expansion falls below assumptions
Thailand’s Ministry of Finance is working to limit the extent of a revenue shortfall for the 2025 fiscal year, as lower-than-expected GDP growth weighs on tax collection and overall fiscal planning.
The initial revenue targets were based on projected GDP growth of 4.5% to 5%, but actual economic expansion may fall below 2%.
Permanent Secretary Lavaron Sangsnit stated that the ministry is intensifying efforts to maximise revenue collection and keep any shortfall minimal.
Despite these efforts, underperformance in several tax categories suggests that meeting the original revenue targets will be increasingly challenging.
The net government revenue collected during the first eight months of FY2025, from October 2024 to May 2025, totaled 1.704 trillion baht.
This was 12.75 billion baht, or 0.7%, below projections.
However, it marked a 1.7% increase compared to the same period in the previous fiscal year.
Tax revenues collected by the three primary tax departments amounted to 1.784 trillion baht, falling 55.62 billion baht, or 3.0%, short of projections.
The breakdown includes the Revenue Department collecting 7.79 billion baht less than expected (0.6%), the Excise Department underperforming by 41.99 billion baht (10.6%), and the Customs Department missing its target by 5.83 billion baht (7.1%).
Shortfalls were observed in collections from automobile excise tax, corporate income tax, and value-added tax on imports.
Some of the decline in corporate income tax collections is attributed to firms opting to file online tax returns, with the filing deadline extended into early June 2025.
To help close the gap, the ministry is seeking additional contributions from profitable state-owned enterprises, particularly those with surplus earnings not allocated for reinvestment.
This measure is expected to generate approximately 100 billion baht.
Other offsetting factors include higher global oil prices and increased domestic car sales, although a significant portion of the latter involves electric vehicles, which are taxed at lower rates.
In terms of the government’s cash-based fiscal position, the Treasury received total revenue of 1.642 trillion baht during the eight-month period, while budgetary disbursements reached 2.593 trillion baht.
To finance the deficit, the government borrowed 777.12 billion baht, leaving the treasury reserve at 338.54 billion baht as of the end of May 2025.
The Ministry of Finance has reiterated its intention to manage fiscal operations within legal borrowing limits and to draw from treasury reserves if necessary.
The ministry will continue to monitor revenue flows throughout the remainder of FY2025 to support the government’s policy agenda and ensure compliance with fiscal discipline.
The initial revenue targets were based on projected GDP growth of 4.5% to 5%, but actual economic expansion may fall below 2%.
Permanent Secretary Lavaron Sangsnit stated that the ministry is intensifying efforts to maximise revenue collection and keep any shortfall minimal.
Despite these efforts, underperformance in several tax categories suggests that meeting the original revenue targets will be increasingly challenging.
The net government revenue collected during the first eight months of FY2025, from October 2024 to May 2025, totaled 1.704 trillion baht.
This was 12.75 billion baht, or 0.7%, below projections.
However, it marked a 1.7% increase compared to the same period in the previous fiscal year.
Tax revenues collected by the three primary tax departments amounted to 1.784 trillion baht, falling 55.62 billion baht, or 3.0%, short of projections.
The breakdown includes the Revenue Department collecting 7.79 billion baht less than expected (0.6%), the Excise Department underperforming by 41.99 billion baht (10.6%), and the Customs Department missing its target by 5.83 billion baht (7.1%).
Shortfalls were observed in collections from automobile excise tax, corporate income tax, and value-added tax on imports.
Some of the decline in corporate income tax collections is attributed to firms opting to file online tax returns, with the filing deadline extended into early June 2025.
To help close the gap, the ministry is seeking additional contributions from profitable state-owned enterprises, particularly those with surplus earnings not allocated for reinvestment.
This measure is expected to generate approximately 100 billion baht.
Other offsetting factors include higher global oil prices and increased domestic car sales, although a significant portion of the latter involves electric vehicles, which are taxed at lower rates.
In terms of the government’s cash-based fiscal position, the Treasury received total revenue of 1.642 trillion baht during the eight-month period, while budgetary disbursements reached 2.593 trillion baht.
To finance the deficit, the government borrowed 777.12 billion baht, leaving the treasury reserve at 338.54 billion baht as of the end of May 2025.
The Ministry of Finance has reiterated its intention to manage fiscal operations within legal borrowing limits and to draw from treasury reserves if necessary.
The ministry will continue to monitor revenue flows throughout the remainder of FY2025 to support the government’s policy agenda and ensure compliance with fiscal discipline.
