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 January 2012 : Cabinet Reshuffled
Cabinet reshuffled after 5 months After 5 months in office, the Yingluck administration reshuffled 16 cabinet positions of which 6 have been transferred and 10 replaced. The transferees are:
The new replacements are:
Victims of political violence get compensation On 10th January the Cabinet approved compensation for victims of violence from the coup in September 2006 to the riots in April 2010 as recommended by the Truth and Reconciliation Commission chaired by Deputy Prime Minister and Interior Minister Yongyuth Wichaidit. Monetary compensation will be provided to all victims: state officials, reporters, protesters and families of deceased persons. The deceased and disabled will each get Bt. 4.5 million plus the amount of actual loss such as funeral, medical and rehabilitation expenses making a maximum of Bt. 7.75 -7.95 million per person. Further, the Cabinet in a secret session resolved to allow a budget of Bt. 43 million to bail detainees arrested during the 2010 violence. Executive decrees used on 4 finance bills On 26th January, the Royal Gazette website, www.ratchakitcha.soc.go.th, published 4 emergency decrees making them legally enforceable. They are:
The FIDF Bt. 1.14 trillion debt was the result of bonds used to guarantee creditors’ accounts after the collapse of 56 financial institutions in 1997/98. Interests had been paid from state expenditures but the decree means that FIDF will now only pay interests and BOT the principle. BOT is also authorized to increase the maximum rate for its guarantee of commercial banks’ deposits from 0.4% to 1%. Democrat Party MPs and 69 senators petitioned Constitutional Court to rule on the constitutionality of the first and second decrees as these may contravene Section 184 (1) of the Constitution because executive decrees should only be used in an emergency. Senate approved 2012 budget On 24th January, the Senate approved the 2012 Budget by 82 to 49 votes. The Bt. 2.23 trillion Bill is now ready for royal endorsement. New tax ID with 13-digit numbers The Revenue Department announced that a new 13-digit Tax ID would be used instead of the current 10-digit numbers starting from 1st February 2012. However, withholding tax certificates, tax invoices, receipts and invoices which have already been prepared using a 10-digit Tax ID numbers can continue to be used until 31st January 2013. Bt.100 million for provincial women development fund On 31st January, the Cabinet approved the establishment of the Provincial Women Development Fund to enhance women’s accessibility to financial resources in order to boost their capacity and career development. Each province will receive a maximum fund of Bt. 100 million according to the number of their population. A national committee comprises of representatives from national and provincial levels will be the supervisory agency and it is anticipated that the funding will be available on 8th March to celebrate the International Women’s Day. Bt. 2.27 trillion national revitalization plan On 6th January, the Strategic Committee for Reconstruction and Future Development (SCRF) chaired by Dr. Weerapong Ramangkul approved 5 strategic plans as follow:
The Bt. 350 billion water management plan will focus on:
Flood prevention agreement for 2012 On 26th January, the government and BMA reached agreements that the two agencies will cooperate in preventing floods in the following areas:
Corruption cost is 25-30% The University of the Thai Chamber of Commerce unveiled a study on corruption completed in December 2011. From 2,400 samplings nationwide, it found that in order to get public contracts, the private sector had to pay an additional 25-30% of the cost totaling more than Bt. 200 billion annually. The most corrupted one are: road/bridge construction, equipment procurement, flood compensation, crops and livestock compensation and other financial aids. Pramont Sutheewong, Chairman of the Civil Network against Corruption said that the private sector had to pay additional sums otherwise they would not get the contracts. The organization is trying to find solutions, for example, by amending state contract regulations. Civil servant pay rises On 31st January the Cabinet approved in principle to raise civil servants’ salaries following an election campaign promise which would be retroactive to 1st January 2012. One of the raises is for bachelor degree graduates whose current monthly salary is Bt. 9,140 to be increased to Bt. 15,000. A budget of Bt. 18,396 million is expected to be required for 2012 increased to Bt. 24,500 million for 2013. A proposal to amend lese majeste law On 16th January, a group of Thammasart University lecturers called “Nithirat” launched a campaign to amend Article 112 of the Criminal Code widely known as the lese majeste law. They argue that the offence is not a crime against state security and punishment should be reduced to a maximum of 3 years imprisonment. They also proposed that there should be exemption from prosecution for honest expressions and any charges to be brought only by the Office of His Majesty’s Principal Private Secretary. Article 112 states, “A person who defames, insults, or threatens the King, the Queen, the Heir-Apparent, or the Regent, is liable to be punished with imprisonment for 3-15 years.” A plan to privatize 2 state enterprises Dr. Weerapong Ramangkul, Chairman of the Strategic Committee for Reconstruction and Future Development (SCRF) disclosed a proposal to let the State financial arm, Vayupak Fund, buy from the Finance Ministry a 2% share in PTT and Thai Airways International. In this way, the two public companies would be only 49% state owned and will no longer being state enterprises. As state enterprises, debts of PTT and Thai Airways International are categorized as public debt and are included in the total Bt. 4.3 trillion public debt or 41% of national GDP. PTT has debt of Bt. 700 billion and Thai Airways International Bt. 200 billion. By lifting these Bt. 900 billion away, the government would have more room to mobilize funds by issuing domestic bonds or make more borrowings overseas. The Public Debts Management Office revealed that during the past 10 years, public debt repayment rate is approximately 12-13% of annual expenditures and in line with 15% financial sustainability rate. However, repayment was mostly for interests not principals, therefore, public debts have increased and becoming long-term problems. In 2012, Bt. 222 billion or 9.33% of the total annual expenditures was allocated to repay public debts. Policy on diesel excise tax extended On 24th January, the Cabinet resolved to extend the excise tax reduction on diesel for another month making the Bt. 0.005 per liter tariff applicable until 29th February. After taking office, the Yingluck administration made good election campaign promises by reducing the price of petrol by stopping payment into the petroleum fund. The payment was collected from benzene to subsidize diesel market price. The new petroleum policy makes benzene prices dropped sharply by Bt. 7.00 per liter while the non-subsidized diesel jumped accordingly. In order to maintain diesel retail price at Bt. 30 per liter, the government had to reduce excise duty from Bt. 5.04 to Bt. 0.005 for two consecutive periods 1st October-31st December 2011 and 1st January-31st January 2012. This third extension will maintain retail diesel price at Bt. 31.13 per liter. The previous Democrat-led coalition government introduced the excise reduction, aiming to keep diesel price below Bt. 30 per liter. The present government is planning to reverse that policy but keeps postponing it. The reduction is costing the government approximately Bt. 9 billion a month in lost revenue. Submerged houses and vehicles to get tax reduction On 4th January, the Cabinet resolved to reduce taxes for owners of flooded dwellings allowing them to deduct the actual cost of renovation from their taxable income to a maximum of Bt. 100,000. The dwelling must have been submerged between 25th July and 31st December. Tax reduction can be applied for in either 2012 or 2013 tax year or both, but the combined amount not to exceed Bt. 100,000. Houses, including fences and gates, and condominiums are eligible. Tax reduction is also applicable for the cost of repairing vehicles damaged during the same period but to a maximum of Bt. 30,000 and applicants must be owners or lessees of the vehicles. It is expected that the State will lose Bt. 4,120 million from these measures. Measures to ease flooded factories On 4th January, the Cabinet also resolved to ease the plight of flooded factories by waiving corporate tax for 8 years as follows:
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