Source: Excise mulling retail price base

Source: Excise mulling retail price base

A consumer walks into a 7-Eleven outlet. The amended excise tax may be based on tag prices at modern trade and convenience stores. Panupong Changcha
A consumer walks into a 7-Eleven outlet. The amended excise tax may be based on tag prices at modern trade and convenience stores. Panupong Changcha

The Excise Department may use retail tag prices at modern trade and convenience stores as the recommended prices for consumer goods, says a Finance Ministry source.

Finance officials have been working on a reform of the excise tax to create fairness among taxpayers.

The crucial amendment to the law is a change in the base for tax computations from the existing ex-factory prices and costs, insurance and freight (CIF).

A source who requested anonymity said the Excise Department is considering the use of retail prices as the calculation base because the massive amount of daily purchases across a wide range of goods better reflects the average price of goods.

"If the Finance Ministry agrees with the idea, the Excise Department will look into each product and use those stores' retail prices as a mean value for calculation for each product," the source said.

The new excise tax bill has passed the National Legislative Assembly and is awaiting royal endorsement, after which the finished law will be announced in the Royal Gazette.

After that, the Excise Department will have 180 days to finalise more than 100 organic laws to cover the details.

Some types of goods, such as imported liquors, are unable to use tag prices because some importers use them at their own restaurants. This is one issue that the department will have to figure out later.

Previously, a representative of the American Chamber of Commerce asked the Excise Department to provide clarity on which prices would be used as the calculation base. AmCham had been against a Finance Ministry idea to use catalogue prices as recommended retail prices for the auto sector.

European and American carmakers with assembly plants in free-zone areas have used CIF values as the base for excise tax calculation, while the Excise Department believes CIF understates value by 20-30%.

CIF use has triggered charges of unfairness between carmakers located in free zones and non-free zones, as some have taken the opportunity to relocate their plants to the free-zone areas.

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