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Government to set minimum prices for cigarettes

16 Mar 2011. The finance ministry will require minimum retail prices for cigarettes to prevent foreign producers from flooding the market and to safeguard people's health, reports The Nation.

Finance minister Korn Chatikavanij also said he approved the Excise Department's change in the tax calculation on cigarettes from factory prices to retail prices, which would lead to more revenue for the government.

"We will base the new tax calculation on retail prices and take into account health concerns, and we will also require minimum prices for each cigarette to prevent dumping by manufacturers," Korn said.

The law change is expected to be forwarded to the Cabinet soon, he said.

The announcement comes in the wake of a parliamentary debate that include a charge by the Pheu Thai Party that the government had helped tobacco company Philip Morris evade tax. According to The Nation, the Customs Department reported no unpaid taxes by the company.

Meanwhile, a dispute over import prices of cigarettes between the department and the company is pending in the World Trade Organisation, said Korn. (sra)