Tobacco Monopoly seeks excise tax revision

The new excise tax structure has dealt a big blow to the state-owned cigarette producer, whose sales are estimated to plummet by 41% compared to last fiscal year.

Deputy Finance Minister Wisudhi Srisuphan said on Thursday the ministry was considering Thailand Tobacco Monopoly’s request for a review of the new structure.

The monopoly's employees are also seeking signatures to file a complaint against the ministry with the Administrative Court. Its sales are estimated to plunge 41%, leading to a loss of 1.6 billion baht in fiscal 2018 ending October next year when taking into consideration municipality tax and earmarked taxes it is required to pay to finance an agency and four funds.

Like the old structure, the new excise tax law is based on both quantity and prices.

In terms of quantity, it is taxed 1.20 baht apiece and the prices used as the base was changed to suggested retail prices from ex-factory prices or declared imported prices. The rates are 20% for a pack of cigarettes priced not more than 60 baht and 40% for a pack of more than 60 baht.

After the new rates came into effect in mid-September this year, importers cut the retail prices of some types of imported cigarettes to 60 baht a pack to take advantage of the new rates. They have therefore attracted more buyers at the expense of Thailand Tobacco Monopoly.