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Proposed amendments to the constitution will not weaken Thailand's political stability, according to Surapong Suebwonglee, the deputy prime minister and finance minister.

Dr Surapong, who last week was in Washington to attend the annual meetings of the International Monetary Fund/World Bank, has also been travelling to Japan and the United Kingdom over the past two weeks to brief institutional investors about Thai policy and economic trends.

He said investors were interested in the government's infrastructure megaproject plans and the political situation.

'Investors, particularly in the US and the UK, asked about politics. I gave them reassurances that the constitutional amendments are aimed at supporting democracy. We intend this process to be a transition. It will not lead to political disruption or a step back in democracy,' Dr Surapong said yesterday in Bangkok.

The Finance Ministry informed the IMF that economic growth this year was projected at 5% to 6% compared with 4.8% last year. Inflation, projected at 4.5% this year, was being driven by higher oil and farm prices.

Dr Surapong said the IMF welcomed indications that the growth rate for Thailand was improving.

'The IMF appreciated Thailand's projected economic growth rate, as we are the only country in the region that will enjoy higher growth in 2008. Other countries will see their economic growth rates revised down,' he said.

Dr Surapong said the ministry would not ease excise taxes for oil to cut prices, and would allow market forces to operate. However, later he appeared to soften his tone by suggesting that transport and fishery operators might get a tax break.

Instead, he said the government would increase its focus on programmes to promote energy saving.

'Tax reductions for certain sectors like logistics and fisheries are possible because they will not distort the market mechanism. But we will not reduce excise taxes on oil for general users. The principle is that we must not mislead people into thinking that they do not have to save energy,' Dr Surapong said.

The Excise Department has not finalised how it will move with the oil excise tax and plans to consider the issue together with the Energy Ministry, he said.

Dr Surapong said the ministry would soon propose to the cabinet tax incentives for second-hand home transactions, including lowering the property business tax, registration fees and transfer fees to 0.01% from 2%.

'The Interior Ministry is expected to agree with our plan on the reduction of registration and transfer fees. Only property on plots smaller than one rai will be eligible. The incentives will not apply to vacant plots to prevent the benefits from falling on land speculation,' he said.

The government will also submit to the cabinet its plan for skills training for workers as an economic stimulus measure, Dr Surapong added.

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