Beer and wine tax hike next for Excise Department

business August 23, 2012 00:00

By Supanee Phuttisuth,

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The Excise Department is now planning to increase the tax levied on beer and wine, following Tuesday's Cabinet decision to hike duty for liquor and cigarettes.

“The department is also looking at whether it should increase tax on beer and wine,” Benja Louichareon, director-general of the department, said yesterday.

Since the rates levied on beer and wine have already reached the ceiling of 60 per cent of the value, or Bt100 per litre, the department would need to propose a law amendment to the government in order to do this, she said.

The aim was to create equality in the liquor market, as well as to reduce consumption, she explained.

Yesterday, the retail price of liquor was raised by an average of Bt10-Bt20 per bottle.

A market watcher said Blended 285, a spirit produced by Thai Beverage, was likely to cost Bt14 more per bottle, rising from Bt193 to Bt207 or Bt210, depending on the size.

Regency brandy is expected to rise by 2 percentage points based on its sales value, from 48 per cent to 50 per cent.

White spirit, which accounts for a large portion of the Thai liquor market, was unlikely to be significantly affected, the market watcher said. ThaiBev enjoys the biggest share of this product, which is popular in the Northeast.

Benja said she did not believe there would be much smuggling of imported liquor and cigarettes as a result of the new tax rates.

Moreover, consumers were unlikely to shift from liquor to either wine or beer, as they were different markets, the department chief said.

Following Cabinet’s approval of excise hikes on liquor and cigarettes, the duty levied on white spirits rose from Bt120 to Bt150 per litre, that on blended spirits increased from Bt300 to Bt350 per litre, and that on brandy from 45 per cent to 48 per cent of sales value.

Meanwhile, the duty on cigarettes rose from 85 per cent to 87 per cent of sales value.

Benja also clarified yesterday that as a result of the tax hikes, the cost of a packet of cigarettes would be Bt3-Bt14 higher, while white spirits would be Bt5-Bt7 a bottle dearer, blended spirits would cost Bt8-Bt12 a bottle more, and a bottle of brandy would be Bt3-Bt12 more expensive.

Activists have warmly welcomed the government’s decision to raise the tax on cigarettes and liquor, describing it as a move that would reduce the damage on the country as a whole.

“More than half of all offences committed are related to alcohol consumption,” Thirapat Kahawong, the head of an anti-alcohol network, said yesterday.

He was among 30 activists who showed up at the Excise Department to express support for the government’s decision.

Jadet Chaowilai, an adviser to the Network of Alcohol Victims, said the move would reduce the number of injuries, disabilities and deaths caused by alcoholic beverages.

“The move is for the good health and well-being of people,” he said.

A study commissioned by the Thai Health Promotion Foundation suggests higher cigarette prices will reduce the number of Thai smokers by about 0.5 per cent.

“The number of smokers should drop by between 60,000 and 70,000,” said the foundation’s deputy manager, Supreeda Adulyanon. “We will have to introduce other measures too, such as limiting the availability of cigarettes.”

Thailand is currently home to about 13 million smokers.