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Dr Nipon Poapongsakorn, president of Thailand Development Research Institute (TDRI), hopes the excise-tax system could be used more effectively to reduce consumption of alcoholic beverages in Thailand.

"We're consuming too much," he said, adding that the alcohol tax in Thailand is far too low when compared to the social costs resulting from alcohol consumption.

In his opinion, it's necessary to overhaul the excise tax system on alcohol.

"The industry is no longer a monopoly [as in the past]. It is being driven by competitive pressure. In addition, excise tax should not be used as a primary means to generate tax revenue.

"Instead, it should be used as a tool to mitigate social damages caused by alcohol consumption," he said.

According to Nipon, who headed three research projects on the alcohol industry, the current law has allowed excessive bureaucratic judgement in tax measures, resulting in a distorted tax structure that promotes the consumption of beverages with high alcohol content.

In 2007, Nipon was part of a National Assembly committee's unsuccessful attempt to revamp the excise tax law.

The bid drew strong opposition from the powerful alcohol industry as well as bureaucrats who would lose their authority in setting ex-factory prices used in tax calculation.

For example, there are three or four categories for beers, namely economy, standard and premium, resulting in varying base figures for tax calculation and allowing bureaucrats to exercise their own judgement.

For instance, Chang is classified as economy beer, the ex-factory price (inclusive of excise and other taxes) of which is Bt31.58 per 750-cc bottle, while Singha is classified as standard beer, whose ex-factory price is Bt42.9.

As for Heineken, it's classified as premium beer whose ex-factory price stands at Bt45.1.

To lessen opposition, Nipon suggested that new attempts made to amend the excise tax law should not lead to a decline in tax revenues as the government currently collects about Bt90 billion from the alcohol industry annually.

Secondly, the new tax rates should be reasonable as far as mitigating social damages caused by alcohol consumption is concerned.

In addition, the private sector should be given time to adjust to the new tax structure.

Nipon also wants supporters to form an alliance to push for a new tax structure that could better address social problems caused by alcohol consumption.

However, the tariffs should also be reasonable. Otherwise, there will be more smuggled goods.

At present, smuggled goods already account for 11 per cent of high-end whisky brands sold in the Thailand.

"In my opinion, the primary objective of a tax reform is to lessen damages from alcohol consumption. The new tax structure is also supposed to reduce bureaucrats' judgement in tax rates so that there is less distortion in the overall tax structure.

"Every type of alcoholic beverages should be subjected to a tax rate comparable to the marginal cost of society.

"Tax collection is unlikely to fall and may even increase as a result of the rate adjustment due to alcohol's price being inelastic to demand.

"White spirits [which are consumed widely in rural areas] should be subjected to a tax rate based on the same principle. The government should not encourage poor people in rural areas to consume alcohol by using a low tax rate," he said.