Lower rates” will encourage cigarettes”
PUBLISHED: 3 Does 2025 at 05: 42
Academics have criticized the current tiered tax system for cigarettes and called for the government to switch to a single excise tax rate, as the World Health Organization ( WHO ) has suggested.
They claimed that the state’s stacked tax system had failed to encourage new smokers, increase revenue, or stop new ones.
The Excise Department is considering replacing the current system, which has been in place for about four years, according to Dr. Roengrudee Patanavanich, a professor at Mahidol University’s Faculty of Medicine.
To ease the stress on low-income earners, a two-tier system is currently in place for excise duties levied on cigarettes, which includes a 25 % taxes on cigarette packages with a wholesale price of up to 72 baht and a 42 % tax on boxes valued higher than 72 baht.
Regardless of the retail value, packages are also subject to an additional revenue of 1.25 ringgit per smoke. Because there are 20 cigarettes in each group, one group is subject to a duty of 25 baht. Dr. Roengrudee reported that the smoke tax revenue dropped to 51.24 billion baht last season, the lowest level in 15 years, from 64.2 billion ringgit in 2021 to 64.2 billion ringgit in 2021.
Problems developed when the two-tiered tax system replaced the second excise tax rate in 2017, she claimed. Before that, smoke tax revenue increased from 13.6 billion in 1990 to 68.6 billion in 2017. She said that during this time, the country’s smoking rate dropped from 31 % to 19 %.
The Finance Ministry has failed to meet its goal of collecting 60 billion baht in smoke taxes every despite the introduction of the two-tiered tax system in 2017. She said that the issue of unlawful smoking is still unresolved as well. The Excise Department was given a report from the WHO on the cigar income between 2018 and 2019. Thailand may adopt a single income price of 40 % and add an additional income of 1.25 baht per smoke, according to the WHO recommendation.
Additionally, it added that while the tiered tax rates won’t increase Tobacco Authority of Thailand ( TAOT ) revenue, they will help increase foreign cigarette companies ‘ market share. According to Dr. Roengrudee, citing the WHO, the elimination of the structured tax rates does lead consumers to switch to less expensive cigarettes.
The Action on Smoking and Health Foundation’s professional director, Dr. Prakit Vathesatogkit, objected to the TAOT’s plan to implement a three-tiered revenue system. According to him, this would be a retrograde change as different nations are switching to a second income level in accordance with the WHO Framework Convention on Tobacco Control. According to Dr. Prakit, the proposed three-tiered framework will result in lower costs for cigarettes produced by the TAOT, not unlike the prices of illegal cigarettes that are exempt from taxes, Dr. Prakit said. This will also result in lower prices for cigarettes imported from foreigners in order to compete with the TAOT’s cigarettes.
Instead of lowering taxes or implementing multiple-tiered tax laws, the government may tighten controls on illegal cigarettes. More people will start smoking with lower charges, according to Dr. Prakit.