Constitution writers will likely drop the change that will lift the sin tax collected from liquor, cigarette and beer producers after facing strong opposition and reviewing the situation.
Kamnoon Sidhisamarn, a spokesman of the Constitution Drafting Committee (CDC), said on Tuesday some charter writers had agreed to review the provisions related to the earmarked tax.
At present, two public organisations and a fund directly collect the sin tax from cigarette, beer and liquor producers to finance their operations.
The Thai Health Promotion Foundation (ThaiHealth) collects the equivalent of 2% of the excise tax the producers pay the Finance Ministry each year, or around 3 billion baht.
Thai PBS, a state-owned TV station modelled after the United Kingdom's BBC, charges the equivalent of 1.5% of the same base, but not more than 2 billion baht a year.
The new National Sports Fund, which was early this year added to the list of beneficiaries, collects the equivalent of 2% from the same base, or 3 billion baht, resulting in another round of price hikes for sin products early this year.
In late June, Deputy Prime Minister MR Pridiyathorn Devakula proposed that the CDC add a clause that ends the collection of such tax.
He reasoned the need to maintain budget discipline and to prevent fund misappropriation.
Supporters of the change say this does not necessarily mean the producers will no longer have to pay the extra taxes.
Instead, the proceeds will directly go to state coffers before being allocated to the three beneficiaries through normal budgeting procedures based on their real needs and necessities each year. That way, their budgets will be subjected to standard scrutiny like those of other state organisations.
The CDC agreed with the proposal and made the change as suggested by MR Pridiyathorn, it announced on Monday.
The revelation, however, sparked outcries from the beneficiaries of the fund, as well as a number of academics, who warn ThaiHealth and Thai PBS may face distinction.
Some claim the manufacturers are the only party to benefit from the change.
They argue the existing structure keeps politicians' hands off the funds and, in the case of Thai PBS, maintains its independence.
Deputy Prime Minister Yongyuth Yuthavong also confirmed on Tuesday the existing structure would be intact as the two organisations had done "a great job".
Mr Kamnoon admitted on Tuesday the CDC had misunderstood the situation.
"Earlier, we thought the earmarked tax was deducted from state revenue collections. In truth, the organisations are allowed to collect it as a percentage of the excise tax the Finance Ministry normally gets."
The change in the charter, therefore, will not result in more tax revenue for the country. On the contrary, the producers will benefit if the tax is dropped.
"We'll keep any provision that benefits the country. We'll review any that benefits nothing for the country but makes the producers pay less," he said.
The issue will be discussed at the CDC meeting on Wednesday, he added.
"At the very least, we will review the provisional clause from a 3-year grace period before enforcement to a permanent exemption for the existing beneficiaries of the tax before the law takes effect."
They may ease a clause on the fiscal budgeting section — from an absolute ban on the earmarked tax to a warning that fiscal discipline must be taken into consideration when a new organisation is set up to collect the tax.