Thailand Hikes Sin Taxes

August 21, 2012 Taxation in Thailand

Alcohol and cigarettesBANGKOK – The prices of spirits and cigarettes have gone up in Thailand, as the government implemented an increase to excise duties on “sinful” products.

On August 21st the Cabinet approved a proposal from the Finance Ministry of Thailand to hike the excises taxes for tobacco products and alcohol, with the increases set to take effect on the same day.

The new hike will see the excise duties on clear spirits rise from TBH 120 per to TBH 150 per liter of pure alcohol.

The excise tax on blended spirits will rise from TBH 300 to TBH 350 per liter of pure alcohol.

The excise tax on whisky and brandy was raised from 48 percent of the retail value to 50 percent of retail value.

Excise taxes on cigarettes were increased from 85 percent of the retail value of the product to 87 percent of the value.

The new hike will not affect the price of beer and wine, as both products already face the maximum excise taxes allowed by Thai regulations.

According to estimates released by the government the tax hikes will raise tax revenues in Thailand by approximately THB 12 billion per annum, with approximately THB 10 billion of the total coming from the hike to taxes on cigarettes.

Commenting on the newly instated tax hikes the director-general of the Excise Department of Thailand Benja Luichareon said that the increases were minor, as the tax rates on alcohol are already approaching the maximum level allowed in Thailand.

She added that government was hesitant to pursue more drastic hikes, as the change could lead to increased levels of smuggling and tax evasion.

Photo by Javier Prazak