Economy Experts Urge Thailand to Scrap Tiered Cigarette Tax

[webfact]

File photo for reference only

 

A storm is brewing over Thailand's tiered tax system on cigarettes, with sharp criticism from influential academics who want a shift to a single tax rate.

 

The current system, they argue, hasn't stopped illegal cigarette trade, boosted government income, or curbed smoking rates. The World Health Organization (WHO) has already recommended moving to a uniform tax structure, but the government has been slow to act.

 

The present system applies a two-tier approach to taxation: a 25% tax for cigarette packs costing up to 72 baht and 42% for those priced above. All packs are also subjected to a further charge of 1.25 baht per cigarette, slapping an extra 25 baht tax on each pack of 20.

 

Yet, Dr Roengrudee Patanavanich from Mahidol University's Faculty of Medicine highlights a worrying trend. Revenue from cigarette taxes dropped from 64.2 billion baht in 2021 to just 51.24 billion baht last year, hitting a 15-year low.

 

Before the tiered system was enacted in 2017, a single tax rate saw revenue climbing significantly from 13.6 billion baht in 1990 to a remarkable 68.6 billion in 2017. During this period, smoking rates in the country plunged from 31% to 19.1%.

 

With the introduction of the two-tiered system, not only have smoking rates barely budged, but the Finance Ministry's target of collecting 60 billion baht annually from cigarette taxes has remained out of reach.

 

Backing the shift to a single tax rate, the WHO has presented evidence suggesting a uniform 40% tax rate and a 1.25 baht levy per cigarette.

 

This advice aims to sidestep the tiered rates' perceived failings, which some believe inadvertently favour foreign tobacco giants over local players. Dr Roengrudee concurs, stating that lower prices from tiered taxes merely tempt consumers towards cheaper options.

 

Dr Prakit Vathesatogkit, leader of the Action on Smoking and Health Foundation, strongly opposes the Tobacco Authority of Thailand’s (TAOT) proposal to introduce a three-tiered tax system.

 

Calling it a backward move, Dr Prakit argues it could mirror prices of untaxed, illicit products, inviting cheaper imports that compete directly with domestic brands.

 

He stresses that to tackle tax evasion effectively, bolstering control over illegal cigarettes is essential rather than slicing taxes or expanding the tier system.

 

In his view, more affordable cigarettes only serve to incentivise smoking—a consequence neither the government nor the health sector can afford.

 

The debate on cigarette taxes remains a hot potato. As the nation grapples with balancing public health and fiscal gains, the future of Thailand's tax framework hangs in the balance.

 

  Adapted by ASEAN Now from Bangkok Post 2025-05-03

 

 

[Briggsy]

The two tier taxation regime is all to do with lobbying by local producers of cheaper tobacco over foreign companies. Local stakeholders maintain very strong ties with legislators for this reason. This is the same as the beer sector.

 

The reason revenues are dropping is due to vaping not the two-tier taxation system. It could also be the rampant trade in smuggled cigarettes and the fact that law enforcers are paid to look the other way.

[spidermike007]

If Thailand really wanted to boost the economy and step it up to the next level with more affluent tourists, they would lower luxury taxes to 20% across the board, and wine taxes to 30% and it would have a dramatic effect on improving the economy, and tourism. 

 

Lazy politicians become dependent on taxes and tariffs, it's very dumb policy. 

[BangkokReady]

1 hour ago, Briggsy said:

The reason revenues are dropping is due to vaping not the two-tier taxation system.

 

No wonder they're so anti-vaping.

[JoePai]

3 minutes ago, BangkokReady said:

 

No wonder they're so anti-vaping.

So tax it like tobacco - simple !

[BangkokReady]

13 minutes ago, JoePai said:

So tax it like tobacco - simple !

 

I don't think that would help the tobacco manufacturers much.

[dinsdale]

2 hours ago, webfact said:

Yet, Dr Roengrudee Patanavanich from Mahidol University's Faculty of Medicine highlights a worrying trend. Revenue from cigarette taxes dropped from 64.2 billion baht in 2021 to just 51.24 billion baht last year, hitting a 15-year low.

 

With the huge crackdown on vaping I'm sure the revenue has gone up again. Insane stuff.  

[dinsdale]

2 hours ago, webfact said:

In his view, more affordable cigarettes only serve to incentivise smoking—a consequence neither the government nor the health sector can afford.

Yet vaping is illegal and the market closed down on grounds of health which pushes people back to the cigs.  

[JoePai]

13 minutes ago, BangkokReady said:

 

I don't think that would help the tobacco manufacturers much.

Tough - more important 'might' help the health of many people

[BangkokReady]

10 minutes ago, JoePai said:

Tough - more important 'might' help the health of many people

 

I don't think anyone cares about that.  It's more about money.  Hence they don't want anyone vaping.

[JoePai]

18 minutes ago, BangkokReady said:

 

I don't think anyone cares about that.  It's more about money.  Hence they don't want anyone vaping.

But they can tax the vapes etc the same as tobacco so that is not the reason - the real reason is the vested interests of the 'powerful' who have very large holdings in the tobacco insustry and to hell with the smokers

[BangkokReady]

2 minutes ago, JoePai said:

But they can tax the vapes etc the same as tobacco so that is not the reason - the real reason is the vested interests of the 'powerful' who have very large holdings in the tobacco insustry and to hell with the smokers

 

They don't want to tax the vapes.  This is about stopping people from vaping because that would lead to less cigarettes being purchased.

[JoePai]

54 minutes ago, BangkokReady said:

 

They don't want to tax the vapes.  This is about stopping people from vaping because that would lead to less cigarettes being purchased.

Ok so please explain why - when the same amount of tax is received - they want to prioritise cigarettes over vapes ?

[BangkokReady]

1 minute ago, JoePai said:

Ok so please explain why - when the same amount of tax is received - they want to prioritise cigarettes over vapes ?

 

They simply don't want vapes being sold.  They want people to buy cigarettes.  The state owns the biggest tobacco producing company.  The state controls who can sell tobacco products.  The state doesn't want people vaping because that means less money for the state from cigarette sales.

[JoePai]

10 minutes ago, BangkokReady said:

 

They simply don't want vapes being sold.  They want people to buy cigarettes.  The state owns the biggest tobacco producing company.  The state controls who can sell tobacco products.  The state doesn't want people vaping because that means less money for the state from cigarette sales.

A So the State can 'own' (?) the biggest vaping producing companies

B - The State can control who sells vapes

C - There will be the same amount of money form the State - in taxes so that not a reason

D  - Maybe the most important point it would save the State money i.e. mecial expenses for sick people who contract smoking related  diseases  - although there are still problems with health and vaping

 

Next ?

[bkk6060]

Should be 500% filthy dirty habit causes many diseases, death, and big  increase in health care costs.  Raise it  to 500% or ban them forever.

[BangkokReady]

25 minutes ago, JoePai said:

A So the State can 'own' (?) the biggest vaping producing companies

 

Nice idea, but vapes are just too hard to control.

 

25 minutes ago, JoePai said:

B - The State can control who sells vapes

 

It can't.

 

25 minutes ago, JoePai said:

C - There will be the same amount of money form the State - in taxes so that not a reason

 

Taxes aren't the same as income. You're thinking like these State just wants money for the State, which is not the case. The people who control the state want money for them.

 

25 minutes ago, JoePai said:

D  - Maybe the most important point it would save the State money i.e. mecial expenses for sick people who contract smoking related  diseases  - although there are still problems with health and vaping

 

Doubtful. Plus, as with above, this is about money going into people's pockets.

 

25 minutes ago, JoePai said:

Next ?

 

Lol. You're wrong on all points so, next???

[BangkokReady]

23 minutes ago, bkk6060 said:

Should be 500% filthy dirty habit causes many diseases, death, and big  increase in health care costs.  Raise it  to 500% or ban them forever.

 

Same for alcohol and junk food, right???

[JoePai]

1 hour ago, BangkokReady said:

 

Nice idea, but vapes are just too hard to control.

 

 

It can't.

 

 

Taxes aren't the same as income. You're thinking like these State just wants money for the State, which is not the case. The people who control the state want money for them.

 

 

Doubtful. Plus, as with above, this is about money going into people's pockets.

 

 

Lol. You're wrong on all points so, next???

Oh dear, I will do slowly 

If the State cannot control the money it receives from Vapes then you are saying they cannot control the money from tobacco? Of course they can

'the people who control the state want money for them' - as they do with tobacco already, same income

Tobacco/health - it has been proven vapes are (a little) less harmfull that tobacco, fact - and as with money in pockets it may even save them money as State spending on health may be lower so that would mean less taxes in the long term

 

Just substitute tobacco pruducts with vapes - just another product

[BangkokReady]

8 minutes ago, JoePai said:

Oh dear, I will do slowly 

If the State cannot control the money it receives from Vapes then you are saying they cannot control the money from tobacco?

 

Oh dear. You do seem to be having trouble with this topic.

 

If it was that easy, don't you think they would already be doing that?

 

Don't you wonder why, rather than simply making their own vapes, they try to pretend that vaping is worse than cigarettes?

 

They obviously see that it's too easy for illegal vapes to be obtained, therfore making controlling them through licensing too difficult. So they ban them and demonise them instead.

[JoePai]

34 minutes ago, BangkokReady said:

 

Oh dear. You do seem to be having trouble with this topic.

 

If it was that easy, don't you think they would already be doing that?

 

Don't you wonder why, rather than simply making their own vapes, they try to pretend that vaping is worse than cigarettes?

 

They obviously see that it's too easy for illegal vapes to be obtained, therfore making controlling them through licensing too difficult. So they ban them and demonise them instead.

That's good you accept vapes are a better than tobacco for health but just as it maybe easy for illegal vapes to be obtained so can illegal tobacco.

Vapes can be controlled through licensing as tobacco can - tobacco factories can also make vapes alonside tobacco products, so both products can be controlled the same as in many other countries

[Jone500]

7 hours ago, spidermike007 said:

If Thailand really wanted to boost the economy and step it up to the next level with more affluent tourists, they would lower luxury taxes to 20% across the board, and wine taxes to 30% and it would have a dramatic effect on improving the economy, and tourism. 

 

Are you saying… you're promoting alcohol to Farangs who can't even handle it, just so they can stumble out onto the streets pants-free like it's a cultural achievement?

[alien365]

34 minutes ago, Jone500 said:

Are you saying… you're promoting alcohol to Farangs who can't even handle it, just so they can stumble out onto the streets pants-free like it's a cultural achievement?

I doubt those stumbling out of bars will be the wine drinking types. They would be the down as many beers as you can along with shots type. Wine drinkers would generally be in better restaurants, drinking in a more civil manner. 

[ikke1959]

A good stupid idea without thinking.. Make vaping which is less unhealthy illegal but the normal cigarettes makes the cheaper, which worse for your health and will cost more for healthcare of the people.. The best solution is make vaping legal and tax it and the same with cigarettes all at least 42 % tax on it.. Look at the wines.. they are too expensive too because of the tax, and although it promised to lower the tax it never is done and the prices are still too high.. With less tax people will buy more with the result that the tax income will be more.. and for cigarettes it is the same if you want that people stop smoking make it expensive.. Find out what InEurope a package of cigarettes costs because of the high taxes... and I know there will people say Thai people earn less, but if the price will be 100 THB a pacakage I am sure there will be less smoking. The problem however is that the rich owns the tobacco industry and they don't want to loose money and profits, the rest they don't care about 

[Jone500]

6 hours ago, alien365 said:

I doubt those stumbling out of bars will be the wine drinking types. They would be the down as many beers as you can along with shots type. Wine drinkers would generally be in better restaurants, drinking in a more civil manner. 

Bet you the Scots will definitely be mad at you.

[alien365]

7 minutes ago, Jone500 said:

Bet you the Scots will definitely be mad at you.

Of course they will, they're always mad at the English. If you're talking about Buckfast though, thats rarely sold in pubs in the Scotland even. It wouldn't make it here unless TAT wanted to focus on attracting that demographic.