CityNews – The cabinet has approved a new set of excise tax rates which will come into effect on September 16th affecting the price of alcohol, cigarettes and playing cards.
Cigarettes tax will be collected both from volume and value, calculated per cigarette. In term of volume, both cigarette producer and importers will be taxed 1.5 baht per cigarette, increased from 1.1 and then, in term of value, the taxation is divided into two rates, 20% tax for a pack of cigarette that is being sold below 60 baht and 40% tax for above.
According to BBC Thailand, under this new excise tax, a pack of 20 cigarettes are expected to increase by roughly 30 baht.
This new taxation aims to lower the gap of low-priced cigarette and high-priced cigarette. It was reported by Bangkok Post that most of the cheap cigarettes are produced by Thai companies and will be taxed less as they are below the 60 baht threshold.
For alcohol, the new tax structure is changing the leverage between taxing the value and the volume from 80:20 to 60:40. In layman’s terms, alcohol will be taxed depending on its alcohol percentage as opposed to its retail price used currently.
In the statement published, it claims wine will increase to be taxed 1,500 baht per litre of pure alcohol and if it is priced above 1,000 baht per bottle it will be taxed an additional 10% of the retail price. A bottle under 1,000 baht will be exempt from a retail price tax.
The tax ceiling for beer will be increased up to 3,000 baht per litre of pure alcohol and 1,000 baht per litre of pure alcohol for other alcoholic drinks such as whiskey and other spirits.
In real terms, a bottle of Thai beer will increase by roughly 37 baht and a bottle of local whiskey will increase by152 baht per bottle.
According to the Department of Excise, the official announcement was held back to prevent panic buying and over purchase. This new structure is aligned with the national policy that encourages people to maintain good health.