Tax Reforms in Thailand Aim to Deliver Value.

Byline: Neil Muir

Nov. 7--Every month taxpayers pay their taxes to the government -- in 2001 total tax revenue is expected to amount to 717 billion baht.

Individual taxpayers pay about 20 percent of their monthly income in direct taxes (much more if indirect taxes are included) -- and in return they get a range of state-provided services. The breakdown of the budget is there to see -- how much each Ministry gets and spends -- but what is not always so easy to see (from the taxpayers' view) is what is being delivered and whether or not we are getting value for money.

It is not only the taxpayer who can't see this -- the people responsible for running the public sector organisations are often not in a position to say that the job they are doing is satisfactory.

Consider just two of the components of value for money: quality and cost. If public servants do not know what quality standards are expected of them, it is unlikely that quality services will be delivered. If no one monitors the quality of the services delivered, quality is unlikely to be as high as it could be. On the cost side, the current budget allocation process focuses on inputs rather than end results: this means that the government knows how much money it is spending -- but not what it is getting for that money, nor whether it is getting value for money. With an input-based budget process the public service is probably not as cost-effective as it could be, and not as accountable.

The need for the public sector to deliver value for money was made all the more urgent by the economic crisis.

This issue is part of a broader agenda being addressed by Thailand's public sector reform programme. At a macro level, this programme is seeking to improve the performance of Thailand's public sector. The results of this reform will benefit not only the taxpayer, but all Thai citizens.