Thailand's tobacco industry continues to be an important contributor to the country's economy and an essential employer in rural communities, a recent report by the Oxford Business Group has shown.
As Asean's second-largest tobacco leaf producer -- and the 16th largest in the world -- Thailand exported 7.4 billion baht worth of tobacco and manufactured tobacco substitutes in 2021. In 2022, the Thai tobacco industry contributed nearly 60 billion baht from excise taxes -- 12% of the country's total excise revenue.
Oxford Business Group's economic impact report on tobacco in Thailand found that in addition to being an important source of tax revenue, the industry contributes significantly to health promotion with 4.1 billion baht from tobacco-related tax collections annually going to the Thai Health Promotion Foundation.
Like most countries, Thailand was significantly affected by the Covid-19 pandemic and is today on a path of economic recovery. During the pandemic, however, the country's agriculture sector proved to be an essential source of income and employment.
The agricultural sector remains an important cog in the national economy, consistently contributing 8.5% of GDP, and a crucial provider of employment, accounting for more than 30% of the national workforce from 2016-21.
"In addition to being a significant contributor to Thailand's economy, our research found that Thailand's tobacco sector is an important employer and is crucial to rural communities and livelihoods, especially in the north and northeast of Thailand," said Marc-André de Blois, director of PR with Oxford Business Group.
"Through its extensive value chain, Thailand's tobacco industry supports nearly 50,000 households directly or indirectly. One key economic advantage of tobacco for these households and their communities is the crop's resilience to floods, droughts and poor soil conditions."
The tobacco industry faces a number of challenges, including the growing availability and sale of illicit products, which is often encouraged by selling at lower prices.
According to a survey by the Thai Tobacco Trade Association, illicit trade through online channels grew 97% between July and September 2022. Data from mid-2021 from the Excise Department shows that illicit cigarettes account for 30% of the country's tobacco market.
Putting the tobacco industry on the national agenda is essential in order to address problems with the illegal trade in tobacco products and to create a more transparent excise tax regime. Proactively doing so will support Thai jobs, grow excise revenue and cement the country's position as the second-largest tobacco leaf producer in Asean.
To download the full report, visit https://tinyurl.com/5dcjzzrk