Makers oppose tax-hike plan

LG Electronics (Thailand) product marketing manager Sinamet Im-Aim said LG's raw-material costs had increased 20 per cent from the same period last year.

Pansiam Engineering's managing director, Ruangpan Sri-on, said its raw-material costs had risen by more than 10 per cent. Pansiam manufactures the Central Air brand.

The price of copper has gone up threefold, while steel prices have doubled. Aluminium and compressors have also seen price rises due to supply shortages.

The makers said if the Cabinet approved the measure, they might have to increase the prices of their products to help them survive.

"We have been trying to cut costs and now there is no other way to cut any more, so we might need help from consumers to help us shoulder the burden," Ruangpan said.

Sinamet said raising the excise ceiling would also have a negative impact on the market for air-conditioners. "Earlier, I estimated the market might drop 10 per cent this year, but if the government enforces the measure, the market could drop 15 to 20 per cent," he said.

He said the penetration rate for air-conditioners was only 20 per cent, but the measure could turn away potential customers.

It would also affect the export industry, he said. Currently, the Kingdom is an air-conditioner export hub, which creates many jobs for Thais, but the measure could hurt the capability to continue hiring or finding new workers.

The measure would also affect the property industry, as many new property projects - which usually offer free air-conditioning for their new units - might have to shoulder higher costs due to the higher prices of air-conditioners.

"Excise tax is meant to be collected for unnecessary products, or products that could harm health or the environment, such as luxury goods, alcoholic beverages, cigarettes and electronic products that consume a high amount of energy. Air-conditioners have already been considered a necessity for daily life. Therefore, I don't think the product should shoulder a higher tax burden from an increase in excise tax," Sinamet said.