Ekniti promotes green transport outlays

The government is preparing to use the remaining 100 billion baht under the 400-billion-baht emergency loan decree to support the energy transition in the transport sector.

Speaking at a discussion on Wednesday on Thailand's path to high-income status organised by The Standard, an online news and media organisation, Finance Minister Ekniti Nitithanprapas said the first 200 billion baht was allocated to easing the public's cost-of-living burden through the co-payment scheme.

The remaining 200 billion baht was allocated between two initiatives: a public solar rooftop programme under which the state offers subsidies of 50,000 baht per household for installation, and investment in a smart grid system to accommodate electricity purchases from households participating in the solar rooftop programme.

However, these energy transition investments combined amounted to only 100 billion baht, he said.

The remaining 100 billion baht will be used to support the country's energy transition by promoting the use of domestically produced fuels, such as biodiesel blended with palm oil and E20 gasoline containing ethanol produced from cassava, said Mr Ekniti.

A portion of the remaining 100 billion baht will be allocated directly to supporting the transition in the transport sector, he noted, with the government encouraging diesel truck and pickup owners to switch to vehicles compatible with B20 or E20 fuels.

In addition, some of the funds will be used for domestic workforce development to support modern industries, said Mr Ekniti.

Economic transformation

Regarding the Thai economy, he described it as K-shaped, with large corporations and multinationals thriving while smaller businesses struggle to adapt.

Yet Mr Ekniti said Thailand remains in a better position than many other countries whose economies the International Monetary Fund managing director described as A-shaped, in which both large corporations and multinationals as well as smaller businesses face difficulties.

"Thailand needs to transform its K-shaped economy into a V-shaped recovery, ensuring that the benefits of economic growth reach both those at the top and bottom of the economic spectrum," he said.

"This requires a strategy to accelerate domestic investment while ensuring that such investment generates broader benefits for the country, including skills training for workers to enable them to participate in modern industries, as well as integrating Thai businesses into the supply chains of these industries."

Actual investment in projects applying for Board of Investment incentives in the third quarter this year expanded by 27% year-on-year, generating employment for 100,000 workers and supporting local supply chains worth 600 billion baht.

Public debt and discipline

Regarding public debt, Mr Ekniti said it is 67-68% of GDP, nearing the statutory ceiling of 70%. He said he would not raise this ceiling.

In fact, Thailand's public debt remains lower than in several other countries, where it tallies 100-110% of GDP, noted Mr Ekniti.

The government's ability to maintain fiscal discipline helped reduce the budget deficit for fiscal 2026, which ended on Sept 30, to 3.4% of GDP, compared with the original target of 4.4%.

The administration set a target to cut the budget deficit to no more than 3% of GDP.

"The government's ability to maintain fiscal discipline enabled Thailand to keep its 10-year government bond yield relatively low compared with those of many other countries. Thailand's yield is around 2%, compared with 5% in the US, 8% in Indonesia, 4% in Malaysia and 2.3% in Singapore," he said.

Tax Revenue

Regarding revenue collection, Mr Ekniti said the government recently approved an increase in excise tax rates on imported battery electric vehicles and range-extended electric vehicles from 10% and 15% respectively to 35%, effective from Jan 1.

In addition to increasing tax revenue, the measure would help ensure greater fairness for the domestic auto industry, he noted.

The administration also implemented the Global Minimum Tax, established by member countries of the Organisation for Economic Co-operation and Development, which requires a minimum corporate tax rate of 15%. This measure is expected to generate an additional 10 billion baht in annual revenue for the Revenue Department.

Regarding the Finance Ministry's decision not to proceed with the proposed outbound travel tax, Mr Ekniti said given the environment of rising airfares and the government's efforts to attract more tourists, the potential revenue from tourism was considered more valuable than any revenue generated by the tax. As such, the trade-off did not justify proceeding with the tax, he said.