Thailand to Reform Excise Structure

Thailand is preparing to change its excise structure for cigarettes, reports The Bangkok Post.

At present, the law applies a 20 percent tax to the retail price for packs costing up to THB60 ($1.83). If the retail price exceeds THB60 per pack, a 40 percent tax rate is applied.

A new flat tax rate of 40 percent was scheduled to be applied since October 2019, regardless of the retail price, but there has been opposition from some stakeholders.

This prompted the ministry to put off its enforcement until Sept. 30 this year in order to review the tax.

Excise Department director-general Lavaron Sangsnit said the new structure aims to strike a balance between farmers’ income, public health, government revenue and efforts to prevent smuggling.

He said the new structure is designed to discourage people from smoking and simultaneously thwart the smuggling of foreign cigarettes, which avoid the payment of duties.

Since the adoption of the two-tier cigarette tax structure in 2017, the department’s excise revenue from cigarettes has fallen from THB68.6 billion to THB62.9 billion in 2020, according to a Bangkok Post source who requested anonymity.

The department collected cigarette tax of THB37.8 billion during the first seven months of fiscal 2021.