Sugary drinks tax looms
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Sugary drinks tax looms

The Excise Department expects to decide on whether it will tax beverages with high sugar content within one month, its chief says.

The Finance Ministry set up a working panel to study how much consumption of such drinks is damaging to health, the amount of sugar content and type of drinks that should be taxed, and the tax impact on sugar-cane farmers, said director-general Somchai Pulsawas.

"The decision should be reached within one month to meet the deadline set by permanent secretary for finance Somchai Sujjapongse," he said.

Mr Somchai said Mexico imposed a tax on carbonated drinks three to four years ago to lower sugar consumption, but the number of diabetic patients there has not declined.

"This is an example of the type of data the department will consider," he said.

The National Reform Steering Assembly has pushed for a tax on sugary drinks, saying they are harmful to health.

The Excise Department taxes carbonated drinks based on volume or value. Fruit and vegetable drinks must contain at least 10% natural ingredients to avoid an excise tax of 20% on the final wholesale price.

In another development, Mr Somchai said the Excise Department collected 350 billion baht in excise tax for the eight months to May, surpassing the target by 17 billion or 5.1%. The total was an increase of 54.4 billion or 18.1% over the same period last year.

The top five contributors to excise tax revenue for the first eight months were fuel and related products at 115 billion baht, vehicles at 67 billion, beer at 62.2 billion, liquor at 44.9 billion and tobacco at 43.1 billion.

In May alone, the department managed to gather 43 billion baht in tax revenue, an increase of 3.39 billion or 8.57% from the month's target. The amount was up 10.9 billion baht or 34.2% over the same period a year earlier.

Fuel and related products contributed the largest tax revenue to the department at 16.4 billion baht, followed by vehicle taxes at 7.79 billion, beer at 5.96 billion, tobacco at 5.61 billion and liquor at 4.86 billion.

Given the higher than expected collection, the department forecast its tax revenue will exceed the target by 20-25 billion baht this fiscal year, ending on Sept 30.

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