The cabinet has approved a 2% increase in the excise tax on liquor, cigarettes and beer so it can better help needy elderly people.
The move is part of the elderly bill approved at its meeting on Tuesday.
The bill stipulates the setup of the Elderly Fund, to be financed by the additional 2% excise tax increase on liquor, tobacco and beer sales, but not more than 4 billion baht a year in total.
The contribution will not affect the excise revenue from the three products, currently at 213 billion baht a year -- 65 billion baht from tobacco, 62 billion baht from liquor and 86 billion baht from beer, said Kobsak Pootrakul, vice minister of the Prime Minister's Office,
The tax increase should take effect next year after the National Legislative Assembly enacts the bill, he said.
The proceeds will allow the government to increase the monthly allowances for the elderly as the current rates are insufficient, Mr Kobsak said.
The monthly allowance for the elderly is now 600 baht. Some 2-3 million elderly people who registered with the government as low-income earners should receive 900-1,300 baht a month following the tax hike while those who did not register will get the old rate, he said.
Currently, the "sin tax" revenue supports three agencies. The Thai Health Promotion Foundation gets the equivalent of 2% of the excise tax rate on the three products, or 4.3 billion baht in 2016. State-owned TV ThaiPBS gets 1.5%, capped at 2 billion baht a year, and the National Sports Development Fund gets 2% or 4.3 billion baht in 2016.
With the new allocation for the Elderly Fund, the Excise Department supports four funds at 7.5% a year in total.