The excise department is planning to reduce base valuation prices used for calculating taxes on cigarettes following complaints from cigarette importers of unfair treatment.

The department had previously announced a maximum retail price as a base for calculating excise taxes, which in turn were based on CIF (cost, insurance and freight) prices as declared by importers.
But declines in CIF have led the department to consider revising downward its maximum prices, possibly by around THB 10 (EUR 0.19) per pack, which in turn will lead to a lower overall tax burden for importers. In addition to excise taxes, the maximum retail price is also used as a base for calculating value-added taxes for goods. The maximum price in practice is often higher than actual retail prices paid by customers.
Chawewan Kongcharoenkikul, a deputy director-general of the customs department, noted that under the most favoured nation (MFN) concept of the World Trade Organisation, tariffs must be levied equally for goods imported from various members. As a result, the maximum retail price method of calculating excise taxes, which is set individually on a brand basis, may not be in keeping with the principles of MFN.
Cigarette importers have been pushing this argument, citing the fact that cigarettes produced by the state-owned manufacturer, Thailand Tobacco Monopoly, have excise charges based on ex-factory prices whereas imported cigarettes are taxed based on the maximum retail price concept. Allowing taxes to fluctuate based on actual market prices rather than an arbitrary figure determined by the state in turn helps foster genuine competition in the market among producers. (sra)