Fiscal Decentralization: The Case of Thailand
By Sutapa Amornvivat, from the International Symposium on Fiscal Decentralization in Asia Revisited, February 20-21, 2004, Hitotsubashi University, Tokyo [Papers]
This paper outlines in great detail exactly what decentralisation means:
The paper also reviews progress as of 2004 towards this goal:
"This paper gives an overview of fiscal decentralization in Thailand. It is divided into 4 sections. The first section begins by describing Thailand’s administrative structure and the past development of political and fiscal decentralization. The second section summarizes the present fiscal framework in the following order: expenditure assignment, revenue assignment, intergovernmental transfers, local government borrowing, accountability mechanism, and monitoring and evaluation procedure. In the third section, the current implementation of fiscal decentralization is analyzed. Key problems on fiscal decentralization—such as efficiency of service deliveries, absorptive capacity, local autonomy, and financial adequacy—are identified and illustrated using available data."
"The bluntest part of the Decentralization Act of 1999 is perhaps its financial decentralization benchmarks. It mandates that local revenues shall be at least 20% and 35% of the government’s total revenue in the fiscal years of 2001 and 2006, respectively...As local sources of revenues were limited, Thai government employed two immediate measures to stimulate local revenues: (1) shifting some tax bases from national to local authorities, and (2) increasing local grants. Shifting tax bases had been implemented in two dimensions. First, some national tax bases has been shifted to local, namely mineral resource tax, land registration fees, gambling tax, groundwater fees, and swallow nest tax. National agencies collect most of these taxes and transfer revenues to local authorities afterward. However, as these taxes are not very productive in generating revenues, the measure does not have significant impacts on share of local revenues.""The second dimension is to increase share of local government in two prominent share taxes: value-added tax and excise taxes. This results in dramatic jump in local revenues. ...significantly increased since 2001." (page 6)
