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Published on March 18, 2008

Deputy Finance Minister Ranongrak Suwanchawee yesterday assigned the Excise Department to study whether taxes should be collected from fixed line and mobile-phone services as well as lotteries.

She said the Finance Ministry had lost Bt15 billion to Bt17 billion in tax income a year over the past two years, after the previous government abolished the telecom excise tax.

The Thaksin government, in 2003, imposed a 10-per-cent excise tax on cellular phone services and 2-per-cent tax on fixed line telephone services as part of the conversion of telephone concessions. At the time, critics claimed that the move benefited the mobile-phone business of the then prime minister's family.

According to the telecom excise payment system in 2003, telecom operators paid the excise tax out of their concession fee to the Excise Department first before paying the remaining concession fee to their state concession owners, TOT or CAT Telecom. This meant TOT and CAT were adversely affected, given that before 2003, they had gained full concession fees from their private telecom concessionaires.

A telecom analyst said if the Excise Department imposed the excise tax by allowing telecom operators to pay the excise out of the concession fee, as in 2003, TOT and CAT would be financially hit again, not the telecom operators.Total Access Communica-tion chief commercial officer Thana Thienachariya said excise tax should be imposed on luxury products, not on necessities like mobile phone services. Ranongrak said that the department also needs to look into a lottery tax. Officials said if the department collected taxes from the government lottery, it could raise tax revenue of Bt1 billion to Bt2 billion a year.

The department should also study the possibility of levying a pollution tax on tyre manufacturers.

"About 12 million car tyres are produced each year. I wonder how the millions of used tyres are disposed of and what impact this has on the environment," Ranongrak told a press conference.

She also asked the department to study a plan to collect tax on plastic and its raw materials due to their environmental impact. The department also suspected that importers of airconditioners might be quoting low prices in order to evade tax, she said.

The department plans to collect Bt287 billion in excise taxes during the current fiscal year.

Wichit Chaitrong

The Nation