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New excise tax rates come into effect; department targets Bt12 billion revenue
NEW EXCISE taxes have affected prices across industries ranging from beverages to cars, with the new tax regime causing higher prices for some items but lower prices for others.
New excise taxes will cause “moderate” rises in the prices of alcoholic beverages, sugary drinks and cigarettes, the director general of the Excise Department, Somchai Poolsavasdi, said yesterday. It may also cause a small rise in prices for imported cars and cars manufactured in customs-free zones.
Somchai told a press conference that the new taxes rates would be effective immediately. The price of many items would not increase and some items would be taxed less, he said. Some producers might absorb rising costs for products facing high market competition, he said, but in any case consumers would not pay much more for these products.
The new excise system is based on the retail price, while the previous system was based on ex-factory or CIF (cost, insurance and freight) prices.
“The new tax system will be more transparent and just as it is based on only the suggested retail price proposed by manufacturers,” said Somchai.
The details are as following: The tax per bottle of wine priced above Bt1,000 will be Bt110 upwards, depending on the price. The tax on locally made wine will decrease by Bt25 per bottle.
The tax on a can of beer will be Bt0.50 higher, and for bottles of beer it will be Bt2.66 more. For higher-priced beer, the tax will decrease by between Bt0.99 and Bt2.
White spirit will be taxed more |by Bt0.84 to Bt3.49 per bottle. For other kinds of locally produced |spirit, the additional tax will be |Bt8 per bottle for drinks with 28 per cent alcohol content and Bt30 for drinks with 40 per cent alcohol content.
The tax on other imported spirits, such as Johnnie Walker Red and Blue Label Scotch whisky, will be a little less, from Bt3 to Bt26 depending on alcohol content. The variance is due to a tax hike on higher alcohol content.
“In the future, the tax will increase based on alcohol content, with high levels of alcohol subject to higher taxes,” said Somchai.
For low-cost cigarette brands priced at Bt60 or lower, the tax will add Bt4 to Bt15 more per pack, while higher-priced cigarettes will be taxed at Bt2-10 more per pack.
“After two years, the tax rates of cigarettes would be the same at 40 per cent of its price and Bt1.2 per roll,” said Somchai.
Sugary drinks are also subject to higher taxes.
Soft drink taxes will be Bt0.13 to Bt 0.50 per bottle, but sugar-free soft drinks will be taxed less by Bt0.28 to Bt0.36 per bottle. Energy drinks will be taxed more, ranging from Bt0.32 to Bt0.90 per can or bottle. Green tea will be taxed Bt1.13 to Bt2.05 more per bottle, and the tax on coffee will be Bt1.35 more per bottle or can.
After two years, taxes on sugary drinks will rise to reflect the proportion of sugar they contain.
Some cars also have higher |taxes.
While the overall tax rate |has not increased, imported cars |and those manufactured in the country’s free-tax zone will see “a small rise”, said Somchai. The latter increase reflects the switch from a tax based on CIF prices to one based on retail prices.
Somchai had been lobbied by manufacturers worried over price rises under the new tax system.
Tax rates on cars are between 20 and 40 per cent, and taxes on pickup passenger vehicles (PPV), “space cabs” and pickups are between 2.5 and 40 per cent. The tax on hybrid cars is 8 per cent, and half that if manufacturers get special tax privileges from the Board of Investment (BOI).
The tax on electric vehicles (EV) and fuel cells is also 8 per cent, down from 10 per cent previously. EVs with BOI investment privileges will be taxed at only 2 per cent.
The Excise Department forecasts that the new excise tax will increase its annual revenue by additional Bt12 billion, Somchai said.