Sin taxes for liquor and cigarettes were increased yesterday, with government officials projecting the tax hikes will generate an additional 12 billion baht in revenue for the state each year.
Benja: Tax hikes ‘relatively limited’
The boost in excise taxes for liquor and cigarettes is also expected to help reduce consumption by increasing consumer prices.
Cabinet members approved an increase in taxes for white spirits to 150 baht per litre of 100% alcohol content, up from 120 baht previously. For blended spirits, the tax was increased to 350 baht per litre of 100% alcohol content, up from 300 baht previously.
The tax hike is projected to raise another 2 billion baht in revenues per year.
Cigarette excise taxes, meanwhile, were increased to 87%, up from 85% previously.
The tax hike is expected to have an even greater impact on retail prices, due to the add-on effect on other taxes.
Officials estimate that store prices for Marlboro cigarettes should increase by eight baht per pack, six baht for Mild Seven cigarettes and six baht for Krong Thip cigarettes.
Imported cigarettes from China could rise in price by as much as 20 baht per pack, after factoring in the increase on other taxes such as value-added taxes and import taxes, officials said.
The cigarette tax hike, which took effect yesterday, is projected to raise 10 billion baht in additional tax revenues a year, according to Benja Louichareon, director-general of the Excise Department.
She said the tax hikes were relatively limited as many rates already were at or near the ceiling permitted under the law. Sharp increases could result in more smuggling or tax evasion, she said, adding the Excise Department favoured an overhaul of the entire excise tax structure to allow current rate ceilings to be increased.
"The Excise Department is responsible only for announcing the tax rate and maximum sales price. If operators are willing to absorb the tax for consumers, they can sell the products at lower prices," she said.
The government yesterday approved a one-month extension of a temporary excise tax cut for diesel fuel to Sept 30. The extension is projected to cost the government 9 billion baht in lost revenues.