THE FISCAL POLICY OFFICE
Official website to www.fpo.mof.go.th
Established in 1961, the Fiscal Policy Office (FPO) is today an instrumental government agency in fiscal, financial and economic policy formulation. The Office, its status is identical to that of a department, has an authority to formulate, make recommendations on, and oversee implementation of fiscal, financial, government borrowings, capital market as well as macro-economic policies.
Broad Policy Outline
- Enhance analytical capability to ensure rational policymaking
- Strengthen processing system
- Revitalize internal administration
- Maintain financial and fiscal stability while fostering flexibility and efficiency of the system as well
- Restructure tax system to attain neutrality and simplification so as to reduce business costs and enhance competitiveness
- Maintain borrowing discipline, taking into account the country's developmental needs and credibility among international institutions
- Encourage savings mobilization
Outstanding Achievements
As an academic arm of the Ministry, the FPO has been an invaluable adviser to the government in formulating and executing various economic policies. Throughout its history, the Office has seen many economic crises befell on the country which were successfully overcome through concerted efforts and close cooperation among various government agencies of which the FPO has always been a prominent member. It also plays an important role in fabricating and laying down the stable and efficient economic system which enables Thailand to develop herself to become one of the fastest growing economies in the world today.
Recent policies implemented by the Office can be broadly categorized in four areas.
- Fiscal policy measures
These encompass the introduction of VAT, tariff restructuring, an adjustment on excise tax levied on automobiles, municipal tax restructuring, modification on government budget compilation and other related procedures, foreign debts restructuring and arrangement for Thailand's credit ratings.
- Financial and capital market measures
- Efforts were made to maintain the financial and capital market stability such as devising measures to discourage profit speculation and insider trading in the stock market, preventing inappropriate or illegal activities which may affect investors.
- The Office also cooperated with the Bank of Thailand in passing an act under which the Securities and Exchange Commission was established. In an endeavor to develop Thailand into a regional financial center, the Office and the BOT helped set up the BIBF operation, relaxing the exchange control, and decoupling financial and securities activities to prevent undue risks and conflict of interest that might arise. The Export-import Bank of Thailand was also established while decentralization and distribution of affluence into regional areas was not overlooked. Lastly, the Office has undertaken a financial sector development plan with an aim to enhance competitiveness and prepare the sector for the liberalization process.
- International trade and investment measures
Significant among these are measures following the creation of the ASEAN Free Trade Area or AFTA and the Common Effective Preferential Tariff Scheme (CEPT Scheme) which is the mechanism to implement tariff reductions agreed upon in ASEAN member countries. The Office is also participating in ongoing activities in the Asia-Pacific Economic Cooperation or APEC, specifically in the Committee on Trade and Investment (CTI) and the Economic Committee (EC).
- Other policy measures
In cooperation with other related agencies, the FPO devised measures to promote human resources development through assistance in education and labor retraining. A macroeconomics model is also being conceived for future policy evaluation.
Future Plans
In order to sustain its successes earned through the past 33 years, the Office has set out four policy objectives: to maintain stable economic expansion, to strengthen the financial and capital market system so as to attain higher competitiveness, to develop Thailand into a regional investment and financial center, and to encourage income and affluence distribution into provincial areas.
With the above aims in mind, the Office is charted to alter its role and structures in two respects. On the policy front, emphasis will be put on increasing efforts in savings mobilization, enhancing adjustment capability of the financial system to evolve with the world, expanding the scope in international economic and trade policy in line with globalization and liberalization processes, augmenting and substantiating expertise in fiscal policy area, and broadening the scope of work in loans and borrowings activities.
On organizational restructuring, the Office plans to create four new divisions which will oversee international economic and tax policies, fiscal policy planning, illegal financial business prevention, and statistics and data processing division. All these will be supplemented by personnel development plan as well as computer upgrading and other technological improvement in the future.
