Cigarette importers warned

Cigarette importers warned

Artificially low prices will not be tolerated

Cigarettes being sold at a convenience store. (Photo: Wichan Charoenkiatpakul)
Cigarettes being sold at a convenience store. (Photo: Wichan Charoenkiatpakul)

The Excise Department has the authority to not approve cigarette importers from setting the product at an unusually low retail price, according to a department source.

The source added that under the current tax structure for cigarettes, which took effect on October 1, retail prices of cigarettes are expected to increase.

The current two-tier structure applies 25% tax on cigarette packs with a retail price of up to 72 baht, and 42% for packs priced higher than 72 baht. Packs are also subject to an additional tax of 1.25 baht per cigarette, regardless of the retail price. This means that one pack is subject to a tax of 25 baht, given that there are 20 cigarettes per pack.

If the cigarette importers set the imported product at a very low retail prices to woo smokers, the department can opt to not approve their prices, the source said.

The department has information on the price structure of all cigarette brands, their previous retail prices, and their net profit margin, the source added.

Competition in the cigarette market was fierce prior to the adoption of the current cigarette tax structure, especially in the segment of imported low-price cigarettes, which had lowered their retail prices to 60 baht per pack from above 60 baht.

Under the previous two-tier tax structure, packs priced up to 60 baht were subject to 20% tax, while those over 60 baht were subject to a 40% tax.

Currently the market share of imported cigarettes and those produced by the Tobacco Authority of Thailand is 50:50.

The department expects additional cigarette excise revenue from the current cigarette tax structure of 3.5 billion baht, on top of the existing 62-billion-baht cigarette excise revenue.

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