The cabinet on Tuesday approved the Finance Ministry's proposal to raise the excise tax on liquor and tobacco, meaning an immediate increase in the retail price of liquor and cigarettes, but not beer or wine.
The excise tax hike is effective immediately.
The alcohol excise tax on rice whiskey was increased from 120 baht a litre to 150 baht a litre based on alcohol content, and for blended liquor from 300 baht to 350 baht per litre. The tax on brandy increased to a maximum of 50 per cent from the existing rate of 48 per cent.
The new rate does not apply to beer or wine, which already face maximum taxes.
Deputy Prime Minister Kittiratt Na-Ranong said an increase in the sin tax will boost government revenue and help deter people from drinking and smoking.
Excise Department director general Benja Luicharoen said the increase will cause the price of liquor to rise.
She confirmed the excise tax on rice whiskey is up from 120 baht to 150 baht per alcohol content (100 degrees) while tax on mixed liquor, such as Chiang Chun (Chinese herbal spirits), is up from 300 baht to 350 baht per alcohol content.
The excise tax on brandy is up from 48 per cent to 50 per cent alcohol content, she confirmed.
Mrs Benja said the higher taxes on tobacco and alcohol will increase her department's revenue by 12 billion baht annually, 10 billion from tobacco and two billion from alcohol.
Observers said the increase would probably raise the price of a bottle of lao khao whiskey by about 10 baht.
The government spokesman did make the announcement at a press conference because of a worry about stockpiling and profiteering.
The government would get about two billion baht in extra revenue from the liquor tax hike, she said.
The cabinet also approved an increase in cigarette tax on the volume side (tax per cigarette, or its weight in grammes) from 85 per cent to 87 per cent. The maximum excise tax allowed is 90 per cent.
This means the price of cigarettes could increase by six to nine baht per pack. Imported cigarettes from China, selling at lower prices, face the highest tax increase of up to 20 baht per pack.