2000年-世界发展银行全球_Thailand___Public_Finance_Review_131页_8mb

Thailand: Public Finance in Transition

Core Content

This report provides an in-depth analysis of Thailand's public finance system in the context of economic crisis and constitutional reforms. It outlines the challenges faced by the Thai government in managing fiscal policy and public finances, and highlights the ongoing reforms aimed at improving fiscal sustainability, transparency, and efficiency.

Main Objectives

1. To assess the performance of Thailand's fiscal institutions in responding to the economic crisis.
2. To evaluate the government's ability to meet the challenges posed by the new Constitution and modernize the public sector.
3. To identify key areas for reform and provide practical policy recommendations.

Key Challenges

• Economic Crisis Impact: The crisis led to significant fiscal pressures, including lower revenues, increased social expenditures, financial system restructuring, and higher public debt.
• Fiscal Sustainability: Ensuring fiscal sustainability requires sound public debt management, asset disposal, and improved revenue administration.
• Fiscal Transparency: Weak transparency in public expenditure management and fiscal reporting distorts resource allocation and accountability.
• Decentralization: The new Constitution mandates fiscal decentralization, requiring the transfer of functions, revenues, and decision-making to local governments.

Fiscal Policy Overview

Fiscal Conservatism

• Thailand's fiscal policy is traditionally conservative, with legal restrictions on running large deficits.
• During the boom years (1976–1996), the government maintained a stable macroeconomic environment, contributing to an average annual growth rate of 8%.
• However, this conservatism did not prevent issues such as increasing income inequality and inefficient public spending.

Crisis Response

• The government effectively reduced budgeted expenditures by 20% during the crisis but faced challenges in fiscal expansion.
• The fiscal stimulus program helped spur consumption but left a legacy of increased public debt, which is projected to rise to over 50% of GDP in the medium term from 16% in 1996.
• Social spending on disadvantaged groups was preserved, but targeting to the poor and unemployed was limited.

Revenue Mobilization

Current Revenue Structure

• Revenue mobilization in Thailand averages 18.4% of GDP, with a significant portion coming from indirect taxes and corporate taxes.
• Direct taxes account for only about one-third of total revenues, with corporation taxes being the primary source.
• The personal income tax system is complex, non-transparent, and distortionary, with a narrow tax base due to exemptions and deductions.

Revenue Challenges

• Revenues fell more sharply than expected during the crisis, raising concerns about tax administration effectiveness.
• Over the medium term, restoring pre-crisis revenue levels is essential for fiscal sustainability.
• Tax policy reforms are needed, including broadening tax bases, reducing tax rates, and simplifying the system.

Reforms Underway

• Tax Collection: Improving the efficiency and transparency of tax collection, strengthening auditing and enforcement, and enhancing information technology.
• Tax Compliance: Establishing a Large Business Tax Administration Office and an automated audit case selection system.
• Information Technology: Developing an integrated computer system for better taxpayer account management and audit case selection.
• Compliance Strategy: A critical next step is to develop a comprehensive compliance strategy.

Public Expenditures and Development Outcomes

Expenditure Allocation

• Thailand allocates a relatively large share of its expenditures to agriculture, transportation, health, and education.
• Less is spent on defense, social security, and general public services.

Crisis Impact on Expenditures

• The crisis led to sharp budget cuts and reallocations, with the Bureau of the Budget implementing a top-down approach.
• Despite the cuts, expenditures on education and health were protected, though targeting was limited.

Encumbrances

• On average, 20% of annual budgets are carried forward as encumbrances, affecting the accuracy of spending projections and budget allocations.

Development Outcomes

• Public expenditures contributed to improvements in education transition rates, healthcare coverage, and road construction quality.

Public Expenditure Management

Centralization

• Thai budget processes are highly centralized, which can limit flexibility and distort government agency performance.

Reforms Underway

• Performance-Based Budgeting: A new "flexibility and accountability" framework is being introduced to delegate more authority to sector ministries in exchange for higher performance and reporting standards.
• Policy Evaluation: Central agencies are shifting focus from line-item control to performance review and policy analysis.
• Fiscal Transparency: The government is developing policies and standards to improve transparency, including off-budget reporting and contingent liability management.
• Capacity Building: Significant efforts are being made to enhance financial management systems and meet international accounting standards.

Fiscal Decentralization

Current System

• Thailand has a unitary government with a highly centralized fiscal system, granting limited local autonomy.

Reforms Underway

• Central-Local Functions: A phased approach over four years is being implemented to clarify expenditure functions and reduce overlap.
• Local Revenue Mobilization: Local governments need to improve revenue collection, possibly by introducing new taxes or reforming existing ones.
• Intergovernmental Transfers: The system is being reformed to reduce reliance on specific project grants and increase general-purpose grants based on transparent formulas.
• Local Borrowing: Legal borrowing rights exist for municipalities, but limited resources and cumbersome approval processes hinder their use.
• Responsible Borrowing Mechanisms: The Regional Urban Development Fund is being developed to channel credit to viable local projects.
• Local Accountability: Enhancing local fiscal reporting and involving civil society in local decision-making and monitoring is essential for successful decentralization.

Key Information

• Fiscal Sustainability: Requires sound debt management, asset disposal, and improved revenue administration.
• Tax System Reform: Focus is on simplifying the personal income tax system, improving transparency, and enhancing compliance.
• Decentralization Strategy: Includes functional assignment, revenue sharing, intergovernmental transfers, and local accountability mechanisms.
• International Comparisons: Thailand's tax system and fiscal management practices are being benchmarked against international standards and other countries' experiences.

Conclusion

The report emphasizes the need for a comprehensive reform agenda that includes strengthening tax administration, improving fiscal transparency, and implementing a more effective and accountable expenditure management system. Decentralization is also a critical component of the reform process, requiring careful planning and execution to ensure fiscal sustainability and equitable resource distribution. The government's Public Sector Management Reform Program is central to achieving these goals.