Thailand: Excise Tax Overhaul Affects Alcohol
The new excise tax will mark a substantial change in how Thailand computes taxes for products such as vehicles, alcohol, cigarettes, non-alcoholic drinks, batteries, crystal glass and air conditioners. The system replaces the existing ex-factory prices and cost, insurance and freight (CIF) values with suggested retail prices. The Excise Department hopes that the new basis will create a fairer system for manufacturers and importers after the revelation that some businesses were exploiting ex-factory and CIF values to understate their tax bills.
Currently the cabinet is working on the finalization of details. The cabinet will seek to approve new duties for alcohol and cigarettes shortly before the new excise tax regime comes into force on Sept 16.
In the case of alcohol, non-alcoholic drinks and cigarettes, the tax-collecting agency will survey prices from mom-and-pop shops, convenience stores and modern trade to set the mode used as the reference price for excise tax calculation, the source said.
If any vendors sell these products at below the Excise Department’s mode, the agency has a mandate to demand that they raise their retail prices to at least 95% of the mode, the source said.