Diesel dreams: Government plans 2-baht tax cut to fuel price drop below 30 baht per litre
The Excise Department is preparing a proposal to reduce diesel tax by 2 baht per litre and aiming to lower the retail price of diesel to less than 30 baht per litre according to the newly formed government.
The proposal is in the pipeline following Prime Minister Srettha Thavisin’s announcement to slash the retail price of diesel to 30 baht per litre from the current cap of 32 baht per litre. The Excise Department is currently preparing data on diesel tax reduction to present to the Ministry of Finance and the prime minister.
Initial discussions indicate a proposal to reduce the diesel tax by 2 baht per litre from the current 6 baht per litre, in accordance with government policy. However, this will require consultation with the Ministry of Energy and the Oil Fuel Fund Office regarding the application of the reduced tax, such as whether it would be used to reduce the retail price of fuel for the public or to offset the burden on the Oil Fund.
The Excise Department estimates that a reduction of 1 baht in diesel tax per litre would impact its monthly tax revenue by 2,000 million baht. If the tax is reduced by 2 baht per litre, the revenue loss would amount to 4,000 million baht per month.
According to the department, the rate is acceptable and less than the previous government’s diesel tax reduction of 5 baht per litre. The duration of the reduction is still subject to policy discussion.
The previous government had approved the extension of diesel tax reduction up to seven times, resulting in a total tax loss of more than 158 billion baht.
- The first reduction was from February 18 to May 20, 2022
3 baht per litre, resulting in a loss of 18 billion baht. - The second reduction was from May 21 to July 20, 2022
5 baht per litre, resulting in a loss of 20 billion baht. - The third reduction was from July 21 to September 20, 2022
5 baht per litre, resulting in a loss of 20 billion baht. - The fourth reduction was from September 21 to November 20, 2022
5 baht per litre, resulting in a loss of 20 billion baht. - The fifth reduction was from November 21, 2022, to January 20, 2023
5 baht per litre, resulting in a loss of 20 billion baht. - The sixth reduction was from January 21 to May 20, 2023
5 baht per litre, resulting in a loss of 40 billion baht. - The seventh reduction was from May 21 to July 20, 2023
5 baht per litre, resulting in a loss of 20 billion baht.
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