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Pattaya Daily News

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24 August 2012 :: 15:08:10 pm 65889

Health Experts Applaud Spike in Alcohol And Tobacco Taxes

The recent tax increase on blended alcohol and tobacco will increase revenue and curb consumption of both products, a spokesperson said. Health officials praised the move. Beer and wine taxes are unaffected, but a future increase is being eyed.
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Ms. Benja Louijarern, the director general of the Customs Department, explained the detail of the Cabinet’s decision to raise taxes on liquor and tobacco.

The tobacco tax increase would be added to the tobacco and cigar stamp, including license types.  As a result, the average retail price of tobacco will increase by 3 to 14 baht per pack, depending on the brand.

For alcohol, the rice whisky tax would result in a price increase of about 5 to 7 baht per bottle; mixed liquor would rise 8 to 12 baht per bottle; and brandy would rise about 3 to 12 baht per bottle.

Mrs. Benja said the tax increase was in order to keep prices in line with current economic conditions, and to reduce alcohol and tobacco consumption. The increased taxes would add 13 billion baht in revenues of the government annually, with10 billion from increased tobacco taxes and 3 billion from increased liquor taxes.

“The plurality noted that the government raised taxes to compensate for the money that is used for populist programs. That is not relevant, because alcohol and tobacco taxes have not been raised for long time, and this increase is to keep up with the economy,” Ms. Benja said.

She also revealed that the department was considering raising beer and wine tax ceiling, to allow a tax increase. Currently both products are taxed at the maximum allowable limit.

However, raising the ceiling would require passing a new law, so it will take time to study the matter and undergo the legislative process to pass the Parliament of Representatives, she said.

Mr. Abhisit Vejjajiva, leader of the Democratic Party, said on a  WanFaMai TV program that he supported the tax raises, but he suggested  the government track smuggling of the taxed products. He also favors measures supporting liberalized trade in the future.

“The problem about revenue, it needs to be analyzed again, and how the financial management of the government works, but I think I’m not concerned if you do it this way,” He said. “I worry more about the government tax revenue from small operators, minor sections, when the revenue is not like expected.”             

Other organizations spoke up about the increased taxes, including Dr. Suprida Adulayanont, vice manager of the Thai Health Promotion Foundation.

Dr. Suprida said she was pleased that the government decided to raise taxes on alcohol and cigarettes for the first time in over three years, and was finally following the example of other countries.

She believed that the tax increase will reduce the amount of smokers by 6 or 7 thousand people. However, she felt that alcohol consumption might be unaffected or not reduced as much.

Dr. Taksapol Thammarangsee  MD., director general of the Center of Alcohol Study, thought the alcohol tax increase was good step in the right direction.

However, he believed that the increase was not enough to really affect the amount of drinking, especially if retailers are willing to bear the burden of the tax increase and not raise their prices to consumers, since the increase is not much.

Also, the government has increased the minimum wage for workers to 300 baht per day and 15,000 baht salary per month, so their increased income might offset any alcohol tax increase, he speculated.

He suggested that to reduce the numbers of long-term drinkers, the structure of the alcohol taxation should be dismantled and revamped. The taxes should target the types of alcohol that are popular among new drinkers such as teenagers, who favor beer and whiskey.

Dr. Prakit Wateesatakakit  MD., secretary general of Action on Smoking and Health Foundation said the tobacco tax increase was a good thing, because it would make it more difficult to have access to cigarettes.

In the last two years, more than 500,000 Thai children have started smoking cigarettes, which is a problem society should be concerned about, he said.

He noted that other countries have been raising tobacco taxes every year, but Thailand has not raised taxes the last three years. Also, the new tax increase of just 6 to 8 baht per pack is not much, he said.

If the government wants to reduce its consumption of smokers, the prices of both tobacco and cigarettes should be linked closer together in taxation rates, to prevent cigarette smokers from shifting to tobacco smoking, he said.

Dr. Piti Siriwan Ragsarit, the director of the Tobacco Control Research and Knowledge Management, said that the tax increase was consistent with the technical guidelines of the World Health Organization.

But if possible, she wants the government tax rate on cigarettes and tobacco to be tied to the inflation rate every year.

“I propose that the government add measures to deal with cigarettes from outside the country, to block the access to cheap cigarettes, because there are many countries in ASEAN who have such measures,” said Dr. Siriwan.

Also, next week, the excise tax department will provide details about restructuring the automobile tax system to the Finance Ministry. Car would initially be categorized according to their carbon emissions, but with a separate tax rate for E 10 and E 20 automobiles that have had a lot of problems.

Category : Thailand News

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