The cabinet on Tuesday approved a sharp increase of the alcohol beverage tax ceiling as proposed by the Finance Ministry.
Under the proposal, which will be enforced under a ministerial regulation, the excise tax ceiling for both fermented beverages such as beers and wines, and distilled beverages such as whisky and brandy, increases to 2,000 baht per litre of 100% alcohol content.
Under the current tax code, the Excise Department collects taxes on fermented beverages at a maximum rate of 100 baht per litre of 100% alcohol content or 60% of the product value, whichever is higher. It collects taxes on distilled beverages with a ceiling of 400 baht per litre of 100% alcohol content or 50% of the value, whichever is higher.
The sharp excise tax rise was proposed to the cabinet on Tuesday by Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong. The cabinet endorsed the proposal, a cabinet source said.
However, the government did not release the news at its usual press conference after the cabinet meeting.
The Finance Ministry would determine the exact tax rates which it will impose.
In addition, the ministry proposed to change the method of calculating excise tax for alcoholic beverages.
It proposed using retail prices or wholesale prices at the last step in the supply chain as the basis for its calculation instead of current methods.
Currently, the Excise Department calculates taxes for locally made alcohol beverages based on ex-factory prices and for imported beverages based on CIF (cost, insurance and freight) prices.
The change to retail prices to calculate the taxes would result in much higher tax collections, the source said.
In accordance with the tax increase, the ministry also sought cabinet approval to set up a fund which will receive 1.5-2% of the total alcohol excise tax take.
The fund will support the disabled, help pay for education, and finance other activities of the Excise Department. The initial amount of the fund is expected to be one billion baht, the source said.