Earmarked tax with Fiscal discipline consistency

  • มุกมณี มุตต๊ะ
  • ศิริญญา ดุสิตนานนท์
Keywords: Tax, Earmarked Tax, Fiscal Discipline


Nowadays, Thailand has been collecting earmarked tax. This type of tax is considered as a new source of income which many modern states collect for specific projects or important public services. This tax has special collecting principal and collecting pattern which differs from other type of taxes. The earmarked tax is mostly passed through the off-budget revenue process which was not included in the annual budget. In other words, the earmarked tax is one type of the government’s finance tool which law states that the government should manage income that collected from taxes and fees, for specific purposes or projects. There were three organizations in Thailand which receive income from earmarked tax. These three organizations include Thai Health Promotion Foundation, Thai Public Broadcasting Service and Nation Sport National Fund. These organizations receive income from those who pay liquor and tobacco taxes. According to the law, Thai Health Promotion Foundation and Nation Sport National Fund received 2 percentage of liquor and tobacco tax, while Thai Public Broadcasting Service receives 1.5 percentage of the tax. Thai Public Broadcasting Service is the only organization which the law states that the organization cannot receive income with the amount over two thousand million Baht per fiscal year.
The collection of earmarked tax may affect the government’s efficiency in expending. This is because the expending for specific purposes would cause an over expending situation. Too much expending can cause lack of ability to expend on other public services, even for the urgently needed. Therefore, this policy does not comply with fiscal and financial discipline Act. Due to the fact that the three organizations had a freely financial management, where the incomes came from liquor and tobacco’s taxes, these organizations’ financial management had been conducted without the representatives’ decisions, as well as, the expending of the organization which received the subvention from earmarked tax might not conform to the citizen’s truly needed and nowadays, Thailand has enforced the State Fiscal and Financial Disciplines Act, B.E.2561 which specifies the government to proceed the financial disciplines efficiency, transparency and verifiable. The government should consider the worthy and the effect to the government financial situation, and especially in collecting income from citizen in the form of tax for specific purposes. Section 25 of such Act states that government agencies shall not send income to treasury provided that the legislative must receive approval from Ministry of Finance and only for urgent matters. Furthermore, the proposed law to collect more tax for specific purpose of each organization is forbidden under the Fiscal and Financial Discipline Act, section 26. However, there is an exception in the case where tax or fee collection is for the Sectors of Provincial Administrative Organizations.
The State Fiscal and Financial Disciplines Act, B.E. 2561 has enforced to restrict earmarked tax for future specific purposes. However, the off-budget fund, which had been founded, should receive appropriate management. Duet the fact that the Fiscal and Financial Disciplines Act, B.E. 2561 has no retroactive effect on the funds which had been established before the enforcement of this Act.
When considered the characteristics of fund, which had a free ability for expending and managing without the agreement and participation from citizen, the funds should have a managing pattern and a clear organization’s duty, where the funds had received the income from the earmarked tax, in order to expend the citizen tax efficiently and expend tax for the greater good. The researcher suggests that the Thai Health Promotion Foundation, which is and organization under the Ministry of Public Health’s control and clearly appointed to support public health. Also, Nation Sport National Fund should be the organization under the Ministry of Tourism and Sports’ control. The duty of these two organizations should be for the health and the sport support in order to integrate with other organizations in the Ministry of Public Health and Ministry of Tourism and Sports. Therefore, incomes for the funds should be collected along with the annual budget. Tax should be delivered to the public revenue and expending through the budget management process and therefore should receive approval from the representatives.
Due to the fact that the Thai Public Broadcasting Service is the public service in a form of public media, the organization needed to be free from the political intervention in order to deliver quality content to the citizen and to be a verification of the difference between private media and public media. The researcher found that it was necessary for the Thai Public Broadcasting Service to remain an independent organization, but should have ability to collect tax from those who possessed television receivers. This rationale is to comply with tax principle, which taxpayer shall be willing to pay tax if they are truly certain that they will receive the benefit from the government.