Tobacco giant criticises new tax; border controls tightened to prevent smuggling

By THE NATION

 

 

BANGKOK: -- AUTHORITIES tightened border controls to prevent smuggling while a leading international tobacco company yesterday urged the government to improve the structure of the tobacco tax to meet global standards after a new excise tax took effect over the weekend, raising the retail price of cigarettes and alcohol.

 

The Excise Department announced a new tax structure and new rates on Saturday. For low-cost cigarette brands priced costing Bt60 or less, the tax will add Bt4 to Bt15 per pack, while higher-priced cigarettes will be taxed at Bt2 to Bt10 more per pack. 

 

Philip Morris Thailand Limited (PMTL) congratulated the Thailand government on the implementation of its new excise tax system based on suggested retail prices, while stating that the company supported the government initiative to address the expansion of cheap cigarettes, but said the new tobacco tax system fell short of international best practices. 

 

“The announced tobacco excise rates still have room to improve to meet the global best practices endorsed by a number of organisations including the World Bank, World Health Organisation and nearly all developed countries,” Gerald Margolis, PMTL managing director, said in a statement. 

 

The new tax system creates a tiered tax by providing a 50 per cent reduction on the ad valorem, or “according to value”, excise rate for cigarettes priced below Bt60 a pack, he said. 

 

The tiered tax structure created an unfair playing field among domestic manufacturers and importers, and would accelerate down trading by providing incentives for manufacturers and importers to produce cheap cigarettes, he said.

 

This would further promote smoking, including among the young. “We believe that the government’s transition plan moving towards a single tax rate at the end of the next two years is a step in the right direction, and fully support and encourage the acceleration of that plan,” he said. 

 

PMTL wanted to move towards a smoke-free future and supported a tax policy based on the principle of tobacco harm-reduction that encourages smokers to switch from cigarettes to less harmful alternatives, such as noncombustible tobacco products, he said.

 

These products and tax policies should bring health benefits to Thailand, Margolis said. He added that the firm was assessing the impact of the new structure and would take necessary steps to maintain a competitive portfolio for its business.

 

Meanwhile, news of the new excise tax kept duty free shops at the borders with Malaysia and Cambodia busy yesterday as Thai consumers looked for cheaper cigarettes and alcohol, according to vendors and customs officials. 

 

The authorities allow the import of one litre of drinking alcohol and 200 cigarettes from abroad free of tax.

People in Yala’s Betong district were making unusual border crossings to buy the items from duty free shops on the Malaysian side yesterday, Thai officials said. They added that they were strictly imposing the quota.

 

In Si Sa Ket province’s Chong Sa Ngam checkpoint yesterday, security and customs officials tightened controls as they feared smuggling of cigarettes and alcohol from Cambodia into Thailand in the wake of the tax rise.

 

Source: http://www.nationmultimedia.com/detail/national/30326950

 

-- © Copyright The Nation 2017-09-18

2 minutes ago, webfact said:

AUTHORITIES tightened border controls to prevent smuggling

If certain people can be smuggled out of the country, I don't envisage too much difficulty getting a few extra cigarettes, or bottles of wine in ! 

How long until they roll this back or are compelled to modify it in some way ?

 

It's targeting what appears to be all sorts of foreign goods which originate from within the ASEAN block but not the Thai products. This is a very clear example of targeted taxation and favouritism towards domestic products.

 

I wonder how many international trade treaties they're breaking with this very quickly announced / implemented law.

1 hour ago, ukrules said:

How long until they roll this back or are compelled to modify it in some way ?

 

It's targeting what appears to be all sorts of foreign goods which originate from within the ASEAN block but not the Thai products. This is a very clear example of targeted taxation and favouritism towards domestic products.

 

I wonder how many international trade treaties they're breaking with this very quickly announced / implemented law.

I guess you can see it as something good too.

" PMTL wanted to move towards a smoke-free future "

 

Strange statement for a tobacco company to make ??

No doubt there will be more gymnastics by the government in the form of another backflip !

" PMTL wanted to move towards a smoke-free future and supported a tax policy based on the principle of tobacco harm-reduction that encourages smokers to switch from cigarettes to less harmful alternatives, such as noncombustible tobacco products, he said. "

 

And the 5,000baht fine for e-cigarettes is also an encouragement.

3 hours ago, webfact said:

noncombustible tobacco products,

Is that like vaping which the grand poobahs are trying to outlaw ?  This country's leadership makes no sense at all.  Vaping will become even more popular in Thailand. 

the blackmarket in thailand is allready huge,with the price of cigs and brooze going up it will increase the markets.they maybe a few more checks at airports.but if yinglick can escape somewhere what will they get in  if they want to 

hide things to sell in thailand

no mention is made in the main article about another viable alternative; namely, brewing your own (beer); my friends and i are seriously considering this route; serious enough to look into buying the required equipment such as an extra refrig

33 minutes ago, yellowboat said:

This country's leadership makes no sense at all.

quite so, current rulers are just lucky thais are sheep up to a point; the trick is to know where that point is, and this bunch does

The joke is that the biggest retailer of duty free booze and fags in my part of Isaan is the wife of an immigration officer based on the border.  So I guess her trade will be increasing.

33 minutes ago, YetAnother said:

no mention is made in the main article about another viable alternative; namely, brewing your own (beer)...

 

It wasn't mentioned because it's illegal without a license, and there is practically no chance at all of getting a license.

The tiered tax structure created an unfair playing field among domestic manufacturers and importers...

 

Yup, its just another tax on imports to protect the local incompetent companies.

No doubt many people will resort to smuggling. Such policies do encourage smuggling and black market.?

How long until they roll this back or are compelled to modify it in some way ?
 
It's targeting what appears to be all sorts of foreign goods which originate from within the ASEAN block but not the Thai products. This is a very clear example of targeted taxation and favouritism towards domestic products.
 
I wonder how many international trade treaties they're breaking with this very quickly announced / implemented law.

It's what is commonly referred to as a "non tariff trade barrier" Basically it's protectionism.

Sent from my SM-N910C using Tapatalk

I have just been in Makro.

Beer and spirits still the same price as before

 

"PMTL wanted to move towards a smoke-free future..."

 

Sure and pigs will fly. Spin doctors at it again! 

 

I wonder if the extra raised revenue will be put into health care?  Somehow I doubt it.

 

Some "selective" purchasing will see the monies end up in the pockets of the powerful/rich. Cynical comment maybe but I don't wear 'rose tinted' spectacles.

I think things will probably start  today or they might be worried about selling old stock

My local shop 50 mtrs away hasn't put up yet but one of her Relo's charged the new price & came over to house & gave me the money back

= Krong Thip smokes 86 bht = New price 93 bht

 

This government didn't know who Phillip Morris was until today. They don't care about world Bank only what they can take off you here now. Mamasans in uniforms.

11 minutes ago, lvr181 said:

"PMTL wanted to move towards a smoke-free future..."

 

Sure and pigs will fly. Spin doctors at it again! 

 

I wonder if the extra raised revenue will be put into health care?  Somehow I doubt it.

 

Some "selective" purchasing will see the monies end up in the pockets of the powerful/rich. Cynical comment maybe but I don't wear 'rose tinted' spectacles.

Health care of the Generals Club

3 hours ago, davehowden said:

" PMTL wanted to move towards a smoke-free future "

 

Strange statement for a tobacco company to make ??

Not at all in my eyes. they are being sarcastic and throwing sand in the public eyes as they know with certainty it would NEVER happened.

 

Great news that local liquor has taken a hammering . . . fewer drunks falling into the river whilst pissing, maybe

1 hour ago, YetAnother said:

no mention is made in the main article about another viable alternative; namely, brewing your own (beer); my friends and i are seriously considering this route; serious enough to look into buying the required equipment such as an extra refrig

It's Illegal to Brew you're own beer in Thailand,       

***The law was updated in 2016. See below for details***

A new law passed by the National Legislative Assembly in December 2016 raised the maximum penalty for illegal production to 100,000 baht or a prison sentence of six months, or both. The maximum fine for selling illegal beer was raised to 50,000 baht.

The ultimate gain for this tax increase is the border control staffs. A sudden windfall for them!

If anyone believes the nonsense, which Philip Morris Thailand Limited (PMTL) is saying,  they must have forgotten to put their brain in this morning.

20 minutes ago, renaissanc said:

If anyone believes the nonsense, which Philip Morris Thailand Limited (PMTL) is saying,  they must have forgotten to put their brain in this morning.

Check this Google link if you don't believe them. 

 

https://www.google.co.th/search?q=philip+morris+e+cig&oq=philip+morris+e&aqs=chrome.2.69i57j0l5.17221j0j7&sourceid=chrome&ie=UTF-8

3 hours ago, newatthis said:

" PMTL wanted to move towards a smoke-free future and supported a tax policy based on the principle of tobacco harm-reduction that encourages smokers to switch from cigarettes to less harmful alternatives, such as noncombustible tobacco products, he said. "

 

And the 5,000baht fine for e-cigarettes is also an encouragement.

Its a lot more than 5000b fine for smoking an e cig on the streets of Pattaya as a friend of mine found out to his cost

6 hours ago, ukrules said:

How long until they roll this back or are compelled to modify it in some way ?

 

It's targeting what appears to be all sorts of foreign goods which originate from within the ASEAN block but not the Thai products. This is a very clear example of targeted taxation and favouritism towards domestic products.

 

I wonder how many international trade treaties they're breaking with this very quickly announced / implemented law.

I have wondered that myself as there is a free trade agreement with Australia and I believe New Zealand yet wines of a comparable quality cost 100 percent more

I suspect that they give the tax another name and the countries concerned don't seem interested

There is no wine industry here to speak of so it's hardly to protect producers just blatant revenue raising

False news spread that tax will rise 100% but 10-15% tax increase is reasonable.