The Excise Department is preparing to review recommended retail prices, which are used as the basis for calculating excise taxes, as the current prices for many products are 5-10% lower than their actual prices.
According to a department source who requested anonymity, when the recommended retail prices are set too low, it results in lower revenue collection.
The department collects 500-600 billion baht annually. If the retail prices are adjusted upwards by about 5%, government revenue could increase by an additional 20-30 billion baht.
The source said the price review will primarily target high-value goods such as automobiles, especially grey-market vehicles, which are high-value imported products with retail prices typically 5-15% lower than their actual prices.
The department announced the implementation of the new Excise Tax Act in 2017, which changed the basis for tax calculation from the previous method of using ex-factory prices or cost, insurance, and freight (CIF) prices, to using the recommended retail prices, excluding value-added tax.
Under this law, in cases where the recommended retail prices do not reflect the actual price or do not align with market mechanisms, the director-general has the authority to announce a recommended retail price to be used as the basis for calculating tax.
This price will be determined from the sale price or import price, according to the criteria and procedures specified in the ministerial regulations.
To verify the recommended retail price in the market, the department will use reference prices from markets where large quantities of goods are sold, such as modern trade stores, as the benchmark for retail prices.
According to the law, the recommended retail price should be determined based on production costs, management expenses, and standard profit margins, and must not be lower than the final selling price to consumers in the regular market.
The change in the calculation method of the excise tax was meant to address vendors setting ex-factory prices or claiming CIF prices lower than the actual prices, which affects the department's revenue collection.
Recommended retail prices are market prices that can be more easily verified than ex-factory prices or CIF prices, the source said.
