Thailand: Tobacco Lobby Counters High Taxes

Source from:  The Nation  09/24/2014

The Thai Tobacco Trade Association (TTTA) has called for excise-tax reform that increases the country's competitiveness. Tax increases will only trigger illegal products and lower the income of retailers and state revenue while the number of smokers will remain the same, it claims.

Varaporn Namatra, executive director of the TTTA, addressed the Excise Department's plan to propose increasing the taxes on alcohol, cigarettes and beer with the objective of making these products less affordable and consequently protecting public health.

She said tobacco-tax reform should be an appropriate solution for all parties and align with the country's overall economic reform plan.

The TTTA agrees with the Board of Trade of Thailand's proposals for excise-tax restructuring whereby levies would be based on retail prices. However, the association says increases in tobacco taxes should be put off for fear of impact on the grass-roots economy.

Reforms will make the taxation system more transparent, more fair and less complicated. The current system fails to address revenue objectives and is complicated, which will hamper integration with the Asean Economic Community, Varaporn said.

"This is the right time for the Ministry of Finance to consider [the Board of Trade] proposal as it will help increase efficiency and the country's revenue in the long run.

"If the tobacco-tax rate hits its collection ceiling of 90 per cent, it will definitely have an impact on cigarettes sales both by the Thailand Tobacco Monopoly and of imported brands.

"The mid-price group will jump from Bt65 to Bt82 [per pack], while the premium segment could see the price as high as Bt114." Enditem