New taxes on alcohol, tobacco, license fees to go into effect this weekend

[MM 6,562]

I'm surprised this topic hasn't been mentioned here...or has it? If it has, would someone tell me where?

 

There are various memes about giving the proposed tax rates, but as of this moment, no one, including 7-11, Family Mart and even wholesale distributors has said they know what the new tax rates are for each product.

 

 

In the days prior to the initial date of the tax increase (today, Sat 16/9/2017) there have been runs on cigarettes and liquor/beer, so much so that many stores are rationing how many cans/cases/bottles or packs you can buy.

 

So, this is a typical junta program...determine tax increases in secret with no public input, announce the date of the increases and make all the businesses respond by setting their new prices, once the date has arrived, don't tell anyone what the tax increases are, leave it to the businesses to rush through updating their prices, menus, advertising immediately on publication of the new rates.

 

Well, I am glad I am not in business selling alcohol or cigarettes, but as a consumer, it would be nice to know just how bad these increases are going to be.

 

From http://www.bangkokpost.com/opinion/opinion/1323951/consumers-made-to-pay-for-government-sins

 

 

s this government becoming broke and hatching a new "sin tax" plan to force allegedly sinful consumers like us to pay more? I couldn't help but raise this speculation with a friend over possible price hikes in alcohol, cigarettes and coffee, when new excise tax rates take effect this Saturday.

Driven by its divine mission to discourage people from drinking and smoking, the nanny state of Thailand has repeatedly increased alcohol and cigarette taxes, dubbed sin taxes, for years. Consumers have been forced to bear the brunt of increasingly expensive beer, wine, liquor and cigarettes.

The Excise Department has defended its latest tax regulation, saying this is not an attempt to increase the government's revenue. Given that the state's tax collection has fallen below its targets in recent years while the regime's spending on military hardware and weapons have been growing, I'm not convinced.

Surasak Glahan is deputy editorial pages editor, Bangkok Post.

Nor am I persuaded by the rhetoric, or the cliche, that this can promote good public health or that it reflects a need to "create a fairer tax system" as claimed by the department.

The worst part of this tax plan is its secretive nature. The department had been working on it for months, but has not publicly revealed the exact excise tax rates that will be imposed on different kinds of alcohol. Consumers have no idea how the new structure will affect them.

Many people have made noise on social media over possible price hikes and how they can cope with them. And no one should say they shouldn't drink if they are poor or cash-strapped. It's discrimination.

Any price hikes can also affect owners and workers in restaurants, bars and grocery stores who can expect a lower numbers of customers.

The department has tried to downplay consumers' anxiety, saying the new taxes wouldn't have "significant implications" on pricing. Really?

Under the new structure, alcoholic drinks will be taxed based on recommended retail prices. This will replace the existing excise tax computation which is based on ex-factory price and cost, insurance and freight values.

The new tax rates will also be based on the degree of alcohol contained, meaning a higher degree will be subject to a higher tax. Oddly, wine products priced at 1,000 baht per bottle or more will be subject to a tax rate higher than those priced lower than 1,000 baht. This has prompted suspicion that the new rule will benefit local wine manufacturers whose cheaper wine products will be subject to lower taxes.

The department will also hikes ceilings for taxes based on product volume by as much as 10 times the existing rates.

According to Forbes Thailand magazine, there will also be significant increases in licence fees. For instance, the alcohol manufacturing fee will be increased to 300,000 baht per year from 5,000 baht. A licence fee for retail sale will be increased to 50,000 baht from 2,000 baht.

If manufacturers and sellers are forced to pay more, wouldn't they pass on the burden to consumers? I would think so.

It's worse for smokers. Cigarette prices will increase by as much as 30 baht a pack. Luckily, I've quit smoking.

True, making alcohol prices too affordable can encourage consumption among youngsters and the underaged. But alcohol prices in Thailand are already high, while consumers have a limited choice of available products. The existing law has made it difficult for small-scale craft beer producers to enter the local market while favouring industrial-scale beer producers.

This new tax rates will hardly affect big businesses that will offset higher taxes with higher retail prices charged on consumers. The state will likely collect more money, given that it has missed its revenue targets. For instance, the government's collection of value-added tax (VAT) on domestic purchases for 10 months leading to July was 6.3% below target. The Revenue Department also missed its revenue target for the October-July period by 4.1%. The Excise Department has reportedly planned to increase its revenue to 600 billion baht next year from 550 billion baht this year.

Alcohol price hikes will rub salt into the wound. Instead of lecturing people on what kind of drink they should pour into their mouths and taxing them more if they don't listen, the government should instead be more prudent in its spending.

For now, consumers have to wait for an announcement on the new applicable tax rates by the Excise Department tomorrow to find out whether they will affect retail prices. Many of us are already feeling the pinch of a stagnant economy. We shouldn't have to pay for wanting a drink.

 

[Harvey 249]

^

Sin taxes seem universal. I'm glad I don't smoke cigarettes here in the states. It feels like taxes on them are more than the actual cost of the good.

 

That being said, consumers still drink and smoke, etc.

 

The thing I just don't understand is how the government can keep the taxation rates secret. Don't restaurant and bar owner have to program their POS (point of sale) systems ahead of the effective date? Ditto stores, markets, etc.

 

How can the government expect the tax increase put into effect in any organized manner? Doesn't this just screw up businesses?

[MM 6,562]

^

Sin taxes seem universal. I'm glad I don't smoke cigarettes here in the states. It feels like taxes on them are more than the actual cost of the good.

 

That being said, consumers still drink and smoke, etc.

 

The thing I just don't understand is how the government can keep the taxation rates secret. Don't restaurant and bar owner have to program their POS (point of sale) systems ahead of the effective date? Ditto stores, markets, etc.

 

How can the government expect the tax increase put into effect in any organized manner? Doesn't this just screw up businesses?

Yes and yess.

 

This is what happens when the govt is not accountable to the people, when it rules by guns rather than votes. Why should they care about inconveniences to citizens?

 

I'm sure when the rates come out (they may have already) that there will be a scramble to implement the new pricing.

[short 215]

I'm surprised that the tax rates aren't higher (and maybe they are) in tourist areas.

[Idefix 2,275]

Lot of noise about this tax increase, but except for the wine it seems very small,

except the 0.3 baht on Coke Zero : scandalous

 

There is a summary-try by BangkokPost :

http://www.bangkokpost.com/news/general/1325583/taxing-times-for-smokers

 

[jacko 8,822]

So a bottle of beer goes up far more than a can of beer.

There are of course bottles containing 0.63 and 0.33L so I hope the figure above applies to the larger bottles.

Either way it doesn't seem to be volume related.

 

In themselves these numbers are not as shocking as expected, there have been some bigger number flying around that were.

 

In a GGB my SML might be 172.05 baht now... actually I would expect the GGB to eat the 2 baht......

 

No mention of draft beer......

Edited September 16, 2017 by jacko

[midlifecrisis 4,048]

Imports. Tax it at the point of entry.

 

Thai products. Tax it at the point of production.

 

That reduces the amount of separate taxations that need to be dealt with. Bars, restaurants and shops don't have to bother with the time and expense to collect the tax. They will pass the increase given to them by the wholesaler onto the consumer and it simplifies everyone's life.

 

Beer Chang. How many bottling plants? How many distributors to consumers? Government will be busy for sure and small business have to spend time dealing with this, another added cost.

 

K.I.S.S.

 

The other side of this is that sin taxes will end up keeping money from being spent. Most people do not have unlimited budgets. So perhaps, if your goal is to keep citizens in a nation from consuming alcohol and tobacco you will have an effect but in tourist frequented establishments, customers will buy less beer so that they spend roughly what they would have spent otherwise. However, they will actually pay the establishment less.

 

Let us say for the sake of argument that the following are the numbers (they are not of course. simplified for the example)

 

1. Say there is no tax. 1 beer costs 200 baht. The customer buys three beers. The establishment's revenue is 600 baht.

 

2. Say there is a 10% tax. 1 beer now costs 220 baht. The customer cannot afford 660 baht for three beers and only buys two. The establishment's revenue is 440 baht of which 40 baht goes to the government.

 

It may seem extreme to high rollers but many many tourists are on a budget. The law will hurt tourism by reducing sales.

 

A shame. I was looking forward to going to the Wine Shop. The two bottles I was hoping to buy is likely down to one bottle, if this is the law in January. 110 baht per bottle of imported wine? I need to save some baht for my massages.

 

Why is the wine tax more than hard liquor? Does Thailand have a cottage wine industry? The climate is not really suited for it. (I saw 4 wineries around Bangkok. 3 NE and one south. Is the wine good?)

[cbrib 354]

Saw this little article from Reuters Thailand taxes

[jacko 8,822]

Saw this little article from Reuters Thailand taxes

404 Not found for me...

[Evil Penevil 7,628]

404 Not found for me...

 

Try this: Thailand sets new excise tax on alcohol, cigarettes

 

Evil

Edited September 17, 2017 by Evil Penevil

[jacko 8,822]

 

Try this: Thailand sets new excise tax on alcohol, cigarettes

 

Evil

That works thanks...

 

They were still selling bottles at 50 baht when I passed an alcoholics corner bar near Arunothai today, so the sky did not yet tumble upon us! Although a friend complained the price of his cigarettes had gone up more than that. He said 30 baht on a pack.

Edited September 17, 2017 by jacko

[cbrib 354]

Sorry the link was dead guys, thanks Evil for getting a working one

[ttk 236]

Another article on the tax.

http://www.straitstimes.com/asia/se-asia/cigarettes-alcohol-and-sugary-drinks-to-cost-more-in-thailand

[juani 0]

I am surprised.

[pattaya_mad 208]

What changes are we seeing in the bars?

[pattysteve 34]

What changes are we seeing in the bars?

So far the bars i use are still the same price,no increases yet.Same with cigs.

[jacko 8,822]

Didn't see much of an increase when I bought a few cases today.

SML Small, case of 24 was 970 baht, I think that is what I paid in August.

Heiny big bottles, case of 12, 820 baht, maybe was 790 last month, not sure.

[tallguy 1,479]

So far no price increases in the bars I have been in or the local 7-11s. However, I am aware that some of the local bars are considering putting prices up by 5 baht per bottle. I don't think this is unreasonable as they have absorbed previous small increases in wholesale prices, at some stage the price was bound to increase.

[MM 6,562]

Marlboro Light cigarettes jumped 20 baht yesterday, going from 125 to 145. In the last two years the price has almost doubled.

[Big_Brian 179]

Spoke to a bar owner last night. A case of 24 Leo has gone up by 40 Baht. He's keeping happy hour prices the same, but putting up by 5 Baht outside then.

[pattaya_mad 208]

Gogo and music bars will be a 10 baht increase I would have thought.

[TheFiend 1,181]

Marlboro Light cigarettes jumped 20 baht yesterday, going from 125 to 145. In the last two years the price has almost doubled.

 

Ouch!!!

[jacko 8,822]

 

Ouch!!!

Duty free on arrival?

[Chang_paarp 253]

Marlboro Light cigarettes jumped 20 baht yesterday, going from 125 to 145. In the last two years the price has almost doubled.

 

Nearly four times that price on the land of Oz. Enjoy the savings.

[Idefix 2,275]

Marlboro Light cigarettes jumped 20 baht yesterday, going from 125 to 145.

In the last two years the price has almost doubled.

Maybe doubled, but looks like the price is not high enough : People continue to smoke...