Thailand: Dual Tax Rates Decrease Revenue

Thailand’s dual cigarette tax rate has led to a decrease in government cigarette tax revenue, according to the Bangkok Post. The decrease is about THB23 billion ($646.8 million), according to Poomjit Pongpanngam, governor of the Tobacco Authority of Thailand.

The new tax structure has caused sales to drop dramatically. According to Pongpanngam, the finance ministry is likely to restructure the cigarette tax rate to a single tax system; however, illicit cigarettes will still pose a problem because they will still be less expensive.

Farmers contracted by the tobacco authority have seen a decrease in income due to the low sales of cigarettes. The authority has been buying 50 percent less tobacco from the farmers over the last three years. The tobacco authority recently stated that it plans to use THB1.3 billion for a production subsidy for tobacco farmers.