Thailand: Excise Department mulling increase in maximum tax rate on beer and liquor

Beer and wine drinkers may face higher prices on top of the tax rises announced for liquor products this week, if Thailand’s Excise Department has its way, Bangkok Post reported on August, 23.

Benja Louichareon, the excise director-general, said the department already imposes the maximum taxes permissible under the law for beer and wine.

But the department wants to increase the maximum rate to give it flexibility to increase taxes further in the future.

Her announcement comes after the cabinet earlier this week approved tax hikes on cigarettes, blended and white spirits that will raise an additional 12 billion baht in tax revenue for the government each year.

The tax hikes will increase cigarette prices by 3-14 baht per pack, depending on the brand and retail price. White spirits are set to rise by 5-7 baht per bottle, blended spirits will be taxed 8-12 baht more and brandy, 3-12 baht higher.

Currently, beer and wine are taxed either using 60% of the ex-factory price or 100 baht per litre based on 100% alcohol content, whichever method is higher.

For both products, taxes are already set at the maximum rate under the law. Ms Benja said if higher tax rates are desired, the law would need to be changed.

The department is considering the issue.

The highest tax-yielding products subject to excise taxes are petrol and other fuels (which together generate 29.5% of total tax revenues for the department), and vehicles (which account for 23% of excise tax receipts).

Beer taxes account for 15% of total annual revenues for the department, followed by cigarettes at 14% and liquor, at 12%.

Revenues for the department from last October to June totalled 274 billion baht.

24 August, 2012