Finance Ministry Considers Tariff Cuts for Industrial Goods
Posted on: Monday, 24 April 2006, 15:00 CDT
By Wichit Chantanusornsiri, Bangkok Post, Thailand
Apr. 24--The Finance Ministry is considering new incentives to help spur private investment and compensate for the unforeseen delays in the government's infrastructure megaproject programme.
Cabinet ministers last week announced that the 1.8-trillion-baht, five-year megaproject programme would be indefinitely delayed pending the formation of the new government. Most analysts do not expect implementation to begin until the first half of 2007.
Naris Chaiyasoot, the director-general of the Fiscal Policy Office, said the megaprojects had been expected to play a key role in spurring new investment.
The megaproject programme envisions hundreds of billions of baht worth of new investments in the power, mass transit, water and services sectors, and is aimed at upgrading the country's infrastructure to support future economic growth.
Dr Naris said Thanong Bidaya, the caretaker finance minister, had directed the Fiscal Policy Office to draft recommendations for stimulus measures to help attract new investment in light of the delays to the megaproject programme.
One possibility would be to accelerate tariff restructuring for key industrial goods. Somchai Sujjapongse, the deputy director-general of the Fiscal Policy Office, said import tariffs for goods used in the auto-parts and food-processing industries were being reviewed for possible reductions.
"Tariff cuts would help strengthen the competitiveness of both the auto and food industries, but would have to be balanced against the impact on domestic producers," he said.
Recent political changes had resulted in delays for a number of state contracts, and it remained uncertain when a new parliament could be formed.
The contracts for the 24-billion-baht civil service complex project on Chaeng Watthana Road, for instance, have yet to be finalised with the builders.
Wisudhi Srisuphan, the director-general of the Treasury Department, said that while negotiations with the contractors had been completed, final contracts would have to wait for the new government to be put in place.
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Copyright (c) 2006, Bangkok Post, Thailand
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Source: Bangkok Post
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