The Nation: Excise tax raised for hard liquor

[Nicke]

QANTI-ALCOHOL MOVE: Excise tax raised for hard liquor
Published on September 07, 2005

Decision will affect brandy, whisky, special blends and distilled spirits. The Cabinet yesterday increased the excise tax on distilled liquor with high alcohol content while maintaining the current tax level on other drinks categories such as beer and wines, the PM’s Office deputy spokesman said yesterday.

Chalermchai Mahagitsiri said after yesterday’s roving Cabinet meeting in Phang Nga that the new taxes would take immediate effect.

“The government’s focus [in restructuring the alcohol excise tax structure] is to curb alcohol consumption. This change is enough to achieve the goal of slashing consumption and raising tax income,” Chalermchai said.

Larger players in the local liquor industry generally welcomed the new tax initiative.

Boonrawd Brewery, maker of Singha and Leo beers, earlier took out ad space in newspapers to show its support of the government’s move to raise taxes on spirits and beers.

Special blends, brandy, whisky and other types of distilled liquors are subject to the change. These types of liquor had been subject to a tax of between 35-50 per cent of market price, or Bt240 per litre of alcohol content. The new rate is 40-50 per cent, or Bt400 per litre - whichever is higher.

A Finance Ministry source said the government refused to raise excise taxes on other kinds of alcoholic drinks because those drinks were already subject to the maximum rate.

If additional taxes were to be levied, it said, the ministry would have to amend the laws governing the excise taxes.

“This will take time, so the government opted to raise taxes on those drinks that are not subject to the limit,” the source said.

Chalermchai said distilled liquor contained a higher alcohol content than other types of alcoholic products. The government believed those types of drinks had a negative impact on drinkers and they should be subject to higher taxes.

“If consumption remains high after this, we can assume that consumers will switch to products with lower alcohol content [which will be comparatively cheaper],” he said.

The Cabinet decided not to raise excise taxes on local liquors that have not yet reached their tax limit. The excise tax limit on local liquor is 60 per cent, or Bt100 per litre of alcohol content.

But in reality they pay only 25 per cent, or Bt70 per litre.

The Cabinet was concerned that if it raised excise taxes on beer, Thai Beverage Plc’s Chang beer would be the hardest hit due to its high alcohol content. Thai Beverage is currently the biggest player in both the whiskey and beer markets and it is preparing to list on the Stock Exchange of Thailand.

The United Nation’s Food and Agriculture Organisation said on its website at www.ias.org.uk that Thailand ranked fifth in the world in alcohol consumption, behind South Korea, the Bahamas, Taiwan and Bermuda.

Available evidence suggests that the number of alcohol drinkers is increasing. The latest survey in 2001 found that the number of drinkers increased from 13.7 million in 1996 to 15.3 million in 2001, representing an increase of 2.3 per cent per year.

Somchai Suthikulpanich, vice president of Thai Beverage Marketing Co, said the maker of Chang beer agreed it was appropriate for the government to raise the excise tax on distilled liquor with high alcohol content.

“The new tax will not have a serious impact on local liquor companies,” he said.

A source at Boonrawd Brewery said the tax hike proved that the government was serious about altering taxes to reduce alcohol consumption.

“In the past, local liquor producers have always objected when the government considered adjusting the excise tax on liquor,” he said.

The Nation

[dawsey]

Raising taxes will not curb drinking.I'm sure this is just an extra revenue for the Thai treasury.
In a way,drinking to excess is a little like smoking in that,we know we shouldnt, but we enjoy it so we will pay the price,whatever the cost.

Will this increase in tax affect your, and other bars Nicke?
Hmm, sorry Black Death has gone up