Luxury and high-priced products will be liable for higher tax payments when a draft amendment to the calculation of excise tax comes into force, likely next year.
With the bill, the Excise Department will be able to charge luxury and high-priced goods based on both retail price and quantity if the selling price to consumers exceeds the limit set by the department, said director-general Somchai Poolsavasdi.
It is a revision from the current law that allows the government to calculate based on either retail price or quantity, whichever is higher, he said.
The revised tax base will reduce unequal tax payment for corresponding products of different prices as the more expensive products will be levied higher tax than cheaper ones. For example, a bottle of wine sold at 1,000 baht, an amount above the department's limit, will be taxed based on both its quantity and retail price.
The draft bill, part of the government's tax reform programme, has already passed first reading in the National Legislative Assembly (NLA) and is pending deliberation by the NLA's ad hoc committee. The Excise Department projected the bill will go into effect by mid-2017.
To facilitate the amended law, the department must issue ministerial regulations on the details, such as the cap on retail price that is subject to only excise tax and the benchmark quantity of goods that can serve as a base for tax calculation.
The department will lower the tax rates for products that now use ex-factory prices or cost, insurance and freight as a base to calculate excise duties, switching to retail price before value-added tax as the base to make revenue neutral, said Mr Somchai.
He said the amendment requiring operators to report their retail price structure to the Excise Department will be the final issue considered by the ad hoc committee.
The draft amendment also raises the licence fees for distributing or shipping goods under the Excise Department, as the current rates were set 40-50 years ago and are not in line with current circumstances, he said.
Some licensing fees set at 500 baht may be increased to 5,000 baht, said Mr Somchai.