The Finance Ministry will raise the tax on diesel in January and prepare to collect a carbon tax from carmakers and other manufacturers in a bid to curb carbon-dioxide emissions. It says the flood crisis has cost about Bt12 billion a month in lost excise-tax revenue.

"We will raise the diesel tax in January but do not know yet by how much," Finance Minister Thirachai Phuvanatnaranubala said yesterday after meeting with excise officials.

The Democrat-led government in April cut the excise tax on diesel to Bt0.005 per litre from Bt5.31, a reduction that was due to end in September. The current government extended the cut to December. The cut has cost the government about Bt9 billion a month in revenue losses.

The tax rise is necessary as the government has to earn more revenue, Thirachai said. Moreover, the excise tax on diesel is part of the government's revamp of fuel-tax policies and its plan to float energy prices while maintaining tax incentives for gasohol.

He also said his ministry planned to impose a new carbon tax on carmakers. Other manufacturers should also be subject to this tax, he said, noting that plastic production and coal burning caused emissions of greenhouse gases that contribute to global warming.

Reform

The Excise Department also plans to increase existing excise-tax rates as part of the government's tax reform. As the government plans to cut corporate income tax, which will result in some revenue losses, increased excise levies will make up the shortfall, he said.

In the long run, excise tax will be a major source of government revenue, he insisted. Vehicles, beer, liquor, cigarettes and oil are major items under the current excise-tax system.

The Finance Ministry will also consider privatising the Playing Cards Factory and the Liquor Distillery Organisation, currently under the supervision of the Excise Department.

"We will also consider whether to privatise other state enterprises," Thirachai said.

Benja Louichareon, director-general of the Excise Department, said the flood crisis had caused tax losses of about Bt12.32 billion a month as carmakers and other manufacturers had been hit hard.

"Honda's and other plants will be allowed to delay tax payment until they can resume their production," she said.

Honda's car plant was hit hard by flooding. If stocks of goods are damaged, manufacturers can get tax refunds, she said.

Benja added that the department collected Bt399.78 billion in the previous fiscal year that ended in September.