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THAILAND

Tobacco tax cut planned for farmers

12 Aug 2019. The Thai Finance Ministry plans to propose a one-fourth reduction in tobacco excise tax to ease the burden on farmers after the previous government raised the tax, The Bangkok Post reported.

The proposed tax cut calls for the new levy to be 5 - 6 times higher, but is lower than the current rate, Deputy Finance Minister Santi Prompat said on Friday. “After the previous administration raised the tobacco tax, 20,000 farmers felt the pinch. Even though the tobacco tax is not a significant portion of the government's tax revenue, revoking the levy is unlikely as Thailand is committed to protecting people from second-hand smoke under international health regulations,” Santi Prompat was quoted as saying.

The military-appointed government approved an increase in excise duty from THB 0.005 to THB 0.01 per gramme to reduce the price difference between factory-made and hand-rolled cigarettes after dozens of smokers switched to hand-rolled cigarettes, the report said. Prices for hand-rolled cigarettes are much lower than for factory-made cigarettes following the introduction of a new excise duty structure in September 2017.

With the change in the structure of excise duties, cigarettes are taxable in terms of both volume and value, irrespective of price. From 1 October 2019, the excise tax for all cigarette packs will be raised to 40 per cent, the report said.