Excise tax organic laws set by August
Organic laws for the new excise tax that will change the tax base computation to recommended retail prices are expected to be announced by August, the Excise Department's chief says.
Tax payments are expected to rise after replacing ex-factory prices and costs, insurance and freight (CIF) values with recommended retail prices as the latter is typically higher, but organic laws are meant to mitigate the tax burden, keeping it marginal, said director-general Somchai Poolsavasdi.
He insisted the new excise tax law will be fair for those who pay the proper amount of tax.
Some vehicle importers, especially grey-market importers, and cigarette importers report a lower CIF than they should to the Excise Department, and they will certainly shoulder a significant higher tax burden, said Mr Somchai.
The new excise tax will take effect from Sept 16 and the department is drafting 80 organic laws.
Regarding the private sector's request to take part in drafting the organic laws because of their concerns about practicality, Mr Somchai said the department already open an invitation to them to play a part in drafting the new excise tax law.
Earlier, Malika Bhumivarn, a partner at Bolliger & Co Consulting Ltd, a specialist on trade and customs, said importers of foreign cars, whiskey and wine have vented their mounting frustrations about Thailand's new excise tax law, saying it may bring about retaliatory measures from other countries.
She said the key areas of concern for the new tax are organic laws that stipulate practical guidelines, adding they may bring about practical problems later if the private sector is barred from taking part in a joint meeting to draft the organic laws.
Mr Somchai said the new excise tax law's recommended retail prices for vehicles to be sold in Thailand will be based on carbon dioxide emissions.
A Finance Ministry source who requested anonymity said some cigarette importers declare CIF values of seven baht a pack, but set domestic retail prices of more than 100 baht, leaving them a high profit.
The excise tax imposed on cigarettes will have a ceiling of 90% of retail price.
Luxury cars importers also often declare a lower CIF value than they should, the source said.