Tobacco giant urges changes to Thai excise system

business September 17, 2017 14:22

By The Nation

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A leading international tobacco company on Sunday urged the Thai government to improve the structure of the tobacco tax to meet global standards. 



The Excise Department announced new tax rates and structure on Saturday.

For low-cost cigarette brands priced at Bt60 or less, the tax will add Bt4 to Bt15 more per pack, while higher-priced cigarettes will be taxed at Bt2 to Bt10 more per pack.

Philip Morris Thailand Limited (PMTL) congratulated the Thailand government on the implementation of its new excise tax system based on suggested retail price (SRP) and supported the government initiative to address the expansion of cheap cigarettes, but it said the new tobacco tax system falls short of international best practices. 

“The announced tobacco excise rates still have room to improve to meet the global best practices endorsed by a number of organisations including the World Bank, World Health Organisation and nearly all developed countries,” Gerald Margolis, PMTL managing director, said in a statement.

The new tax system creates a tiered tax by providing a 50 per cent reduction on the ad-valorem (“according to value”) excise rate for cigarettes priced below Bt60 a pack, he said. 

He said this tiered tax structure created an unfair playing field among domestic manufacturers and importers and would accelerate down trading by providing incentives for manufacturers and importers to produce cheap cigarettes. This would further promote smoking, including among the young.

“We believe that government’s transition plan moving towards a single tax rate at the end of next two years is a step in the right direction, and fully support and encourage the acceleration of that plan,” he said. 

Margolis said PMTL wanted to move towards a smoke-free future and supported a tax policy based on the principle of tobacco harm reduction that encourages smokers to switch from cigarettes to less harmful alternatives, such as noncombustible tobacco products. He added that these products and tax policies should bring health benefits to Thailand.

Margolis added that the firm was assessing the impact of this new structure and would take necessary steps to maintain a competitive portfolio for its business.