Thailand Mulls Single Tax Rate

Thailand’s excise department is considering whether it should implement a single tax rate or a weight-based tax for cigarettes, announced Ekniti Nitithanprapas, excise department director-general, reports Thaiger.

The current tax structure is a two-tier system with a 25 percent tax applied to cigarette packs that retail up to THB72 ($2). This structure is aimed at reducing the impact on low-income consumers. Cigarette packs that retail higher than THB72 are taxed at 42 percent. An additional flat rate tax of THB1.25 per cigarette is also applied regardless of retail price.

The current system has led to manufacturers selling cigarette packs for THB72 to avoid higher tax rates.

If a single rate is decided upon, it would fall between 25 percent and 42 percent.

In October 2021, a 40 percent flat tax rate was set to be implemented but the tobacco authority and tobacco farmers opposed the move due to the potential impact of the tax rate on both parties.

The finance ministry has been tasked to study the cigarette tax structure for the medium-term and the long-term to determine a fair and appropriate single-tier tax rate.