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Decentralization and Local Governance in Thailand 69

The picture is very different, however, where there are serious conflicts of interest between the mayor and the assembly. In these instances, opposition groups in the assembly lobby assemblymen from the mayor’s team to switch sides to block the mayor’s budget proposal. As a result, municipal assemblies can be very unstable, as usually found in many developing countries with unstable coalition government. Elected local politicians in Thailand are frequently motivated by their personal business interests. If their short-term interests are not being served adequately, opposition groups in the municipal assembly go to work trying to undermine municipal executives. If they can criticize the municipal leadership for the gridlock they help create by spreading rumors or blocking budgets, they may hope to replace the existing leadership. The old system, in short, often produced weak municipal leadership. Municipal governments often lasted no more than 2 years.

Mayors, under the strong-mayor system, are directly elected by local residents, and are eligible to hold the mayorship for no more than two consecutive 4-year terms. The mayor can appoint deputy mayors (they need not be members of the municipal assembly): up to two deputy mayors for tambon-level municipal governments, three for town-level municipal governments, and four for city-level municipal governments. Mayors appoint advisors and secretaries who are allowed to sit in on municipal meetings (without a vote).

This system strengthens mayoral executive powers. Even though the municipal assembly can question the mayor regarding policies and administration, it cannot vote no confidence. The strong-mayor system does not allow the assembly to use the budgetary process to unseat the mayor and executive council. According to the Municipal Act of 2000, if a majority in the assembly do not pass the mayor’s budget, the assembly must set up a committee of seven assemblymen, seven mayoral appointees (they need not be assemblymen), and a committee chair appointed through agreement among the fourteen committee members within a week of their initial assembly. The chair cannot be one of the fourteen committee members or an assemblyman. If there is no agreement on who will be the committee chair within 7 days, the provincial governor will appoint a chair. This committee has to consider the budget proposal within 15 days after the chair’s appointment. If three-quarters of the assembly still oppose the committee’s recommendations, the budget proposal is canceled and the municipal government operates under the budget proposal from the previous year’s budget. In this event, the interior minister can dissolve the assembly with the mayor’s consent. The threat of loss of office considerably reduces the likelihood that the assembly will reject the committee’s recommendations (Thailand Municipality Act of 2000).

As a result, mayors under the new system enjoy more secure job tenure. Mayors and other executives can be driven from office only on the approval of the interior minister or if three-quar- ters of eligible municipal voters decide. This process is cumbersome and sets a high hurdle that is unlikely to be often cleared. This strong-mayor system obviously gives tremendous administrative and legislative powers to the mayor and his executives. Under this presidential-like system, municipal politicians who really want to serve the office and local community face lesser obstacles. Candidates for the mayoral position do not need to carry a slate of candidates competing in municipal assembly elections and this may boost the numbers of mayoral candidates in the future.

3.5.3 Fiscal Decentralization

Table 3.3 shows local government revenue in Thailand. The fiscal decentralization process in Thailand focuses primarily on increasing revenue share of national budget. Table 3.4 shows local government revenue share.

The building and land tax is assessed based on the rental value of the houses and buildings for commercial and industrial purposes. It accounts for the largest portion of all local taxes, but is not

© 2011 by Taylor and Francis Group, LLC

70

Public Administration in Southeast Asia

 

Table 3.3 Local Government Revenue

 

 

 

 

 

 

 

 

Centrally Collected Taxes for

 

Own Collected Revenue

 

Local Government

Grants

 

 

 

• Own-collected taxes

• Commerce tax

• General grants

°

Land and building tax

• VAT and specific business

• Specific grants

°

Land development tax

tax

 

• Miscellaneous

 

 

°

Signboard tax

°

VAT

 

 

 

 

°

Slaughter duties

°

Specific business tax

 

 

 

 

°

Swallow nest duties

• Liquor tax

 

 

 

 

°

Tobacco tax

• Excise

 

 

 

 

°

Petroleum tax

• Vehicle tax

 

 

 

 

°

Hotel tax

• Property registration duties

 

 

 

 

 

 

• Gambling tax

 

• Own-collected non-tax

• Royalties for minerals

 

• Royalties for petroleum

 

° Fees and fines

 

• Other

 

°

Revenue from property

 

 

 

 

°

Revenue from infrastructure

 

 

 

 

services

 

 

 

°

Miscellaneous

 

 

 

 

 

 

 

 

efficiently collected due to exemptions for owner-occupiers. Land values are used in computing the land development tax. Municipal governments are responsible for determining land values using current market values based on land sales and must revalue every 4 years. Signboard taxes vary with the size and number of foreign characters. The Slaughter tax varies by the type and number of animals slaughtered (from interviews with directors of the Division of Finance in four municipal governments). Grants from central government were the major sources of municipal revenue. General grant allocations were based on population (150 baht per capita). This general grant was allocated without earmarking for specific uses. Specific grants served various purposes, e.g., developing infrastructure, education, and other programs promoted by central government. Decisions on specific grants were made through discussions between officials in the Division of Local Finance and the Bureau of the Budget. Grants for specific purposes accounted for 45% of all grants and were allocated to local governments through many government bodies, including the Ministries of Interior, Agriculture and Cooperatives, Transportation and Communications, Public Health, Education, Industry, Labor and Social Welfare, Science and Environment, as well as state enterprises and other government agencies.43 Both types of grants, however, were generally provided through the DOLA, MOI. Specific grants are among the most important grants designated for local development purposes, especially those allocated under the subject criteria of the Regional Cities Development Program (RCDP). This program aims to reduce regional income disparities and to dilute the concentration of economic activity and population in and around Bangkok by improving basic infrastructure in secondary cities.

43 Japan International Cooperation Agency, 2001, p. 6.

© 2011 by Taylor and Francis Group, LLC

LLC Group, Francis and Taylor by 2011 ©

Table 3.4 Local Revenue by Sources

Revenue Sources

1999

2000

2001

2002

2003

2004

 

 

 

 

 

 

 

 

1.

Own-collected

9,330.74

11,419.42

12,280.31

13,416.18

14,410.58

15,729.51

 

 

 

 

 

 

 

 

 

 

8.88

11.40

9.46

8.21

7.36

6.77

 

 

 

 

 

 

 

 

2.

Central government

42,887.98

50,262.16

63,643.37

73,100.27

106,983.16

121,666.58

 

collected

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

40.83

50.18

49.02

44.71

54.61

52.34

 

 

 

 

 

 

 

 

3.

Fee and surcharge

8,271.44

6,024.74

4,990.00

5,648.48

5,966.09

6,465.46

 

 

 

 

 

 

 

 

 

 

7.87

6.01

3.84

3.45

3.05

2.78

 

 

 

 

 

 

 

 

4.

Grants

44,546.18

32,464.24

48,905.35

71,342.39

68,556.18

88,594.82

 

 

 

 

 

 

 

 

 

 

42.41

32.41

37.67

43.63

34.99

38.11

 

 

 

 

 

 

 

Total

105,036.34

100,170.56

129,819.04

163,507.33

195,916.02

232,456.37

 

 

 

 

 

 

 

 

 

 

100.00

100.00

100.00

100.00

100.00

100.00

 

 

 

 

 

 

 

 

Source: Department of Local Administration, Ministry of Interior. Thailand (October 2007).

Thailand in Governance Local and Decentralization

71

72 Public Administration in Southeast Asia

Municipal government expenditures include (1) monthly wages and salaries; (2) allowances; (3) general expenses; (4) supplies expenses; (5) stationery expenses; (6) costs of land, construction, and other property; and (7) other expenditures based on specific clauses, regulations, and acts issued by the MOI.

The 1997 Constitution calls for increasing the share of local government revenues and expenditures, assigning more revenue sources to local governments, promoting local fiscal autonomy, and revising the system of intergovernmental transfers to provide grants in a more transparent and predictable way. According to the Decentralization Plan and Procedures Act of 1999, local governments are to be allocated at least 20% of the national government budget by fiscal year 2001 (October 2000–September 2001) at the end of the Eighth National Social Economic Development Plan, and at least 35% by fiscal year 2006 (October 2005–September 2006) at the end of the Ninth National Social Economic Development Plan. These specific targets have been subjects of heated debate. Central revenues will no longer flow solely through the DOLA of the MOI. The Decentralization Plan and Procedures Act of 1999 enables local governments to receive grants from other government agencies and ministries as well, beginning in fiscal year 2001 (Thailand Decentralization Plan and Procedures Act of 1999). Under the 2003 National Budget, central government successfully allocated 184,066.03 million baht, or 22.19% of the total national budget (829,495.60 million baht) to local governments (Thailand Office of Prime Minister, 2002).

3.5.4 Transferred Responsibilities

As a result of fi scal responsibilities that were transferred, responsibilities were also transferred. Under the decentralization surge, municipal governments face major changes. Responsibilities, funding, and personnel are being transferred from central government to local governments all over the country. There are six major categories of responsibilities transferred from all ministries, including (1) basic infrastructure; (2) quality of life; (3) community development;

(4) local commerce, investment, and tourism; (5) environmental preservation; and (6) local cultural preservation and local wisdom (Ministry of Interior, 2003; Thailand Transferring Responsibility Act of 2000). Municipal officials are frustrated with the rapid increase in their responsibilities.

Although municipal governments now receive more funds from central government, their discretion in administering those funds is very restricted. A fierce debate rages as to whether or not earmarked funds transferred to localities should be included in calculating the target of transferring 35% of the national budget to local governments by 2006 (this transferring target of 35% has not yet been met). Municipal governments oppose the inclusion of earmarked funds in these calculations, contending that they violate at least the spirit of decentralization legislation.

One of the major concerns among municipal governments is their responsibilities in managing municipal sewage systems. These responsibilities entail very high operating costs that may be shared if municipal governments can persuade municipal residents to assume some of the costs of the service. Total costs may also be lowered if information is shared and local residents cooperate in service delivery.

Still another burden that municipal governments, especially larger ones, confront is the need to assist new municipal governments in their regions. With sanitary districts elevated to tambonlevel municipalities, these small, new municipalities lack experience in administration. Nearby governments with more resources and capacities are expected to provide technical and personnel help as well as some financial resources to the tambon-level municipal governments.

© 2011 by Taylor and Francis Group, LLC

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