D-day for Bangkok local tax on oil sales

D-day for Bangkok local tax on oil sales

Bangkok motorists will start paying the local development tax charged on retail oil and gas sales at the rate of five satang a litre on Oct 15.

Bangkok Metropolitan Administration (BMA) imposed the levy based on the 1997 provincial administration organisation law and 1999 decentralisation procedures law, which empower provincial administration organisations and BMA to collect the tax at oil or tobacco retail outlets at not more than 0.10 baht a litre including value-added tax, effective Oct 1, 2012, said Vithoon Kulcharoenvirat, director general of the Energy Business Department.

Based on the "polluter pays" principle, the tax has already been collected in most provinces in Thailand, except in Yala, Pattani and Narathiwat, mainly at 0.05 baht a litre. In practice, operators or vendors pay the tax on behalf of users for fear of losing customers.

Oil retailers in Bangkok admitted the higher pump prices might affect their sales.

Most energy users said they were willing to pay more. However, they would like to see BMA's clear development plans such as those on flood prevention or traffic solutions so they know where the money would be spent.

There are around 800 petrol stations in Bangkok and the tax will add 500 million baht to BMA's revenue each year.

City Hall will ask operators whether they can shoulder the burden on behalf of users at a meeting on Tuesday.   

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