Excise Taxes For Cigarettes, Fuel To Rise Soon

[george]

Excise taxes for cigarettes, fuel to rise soon: PM

BANGKOK: -- After raising excise taxes on alcoholic drinks last week, Prime Minister Abhisit Vejjajiva said Sunday that his government is considering raising excise taxes on cigarettes and gasoline as it expects that tax revenue collection will be more than Bt200 billion lower than the amount targeted.

Mr. Abhisit said during his weekly television address that his government had projected that tax collections during the current 2009 fiscal year which ends September 30 will exceed Bt200 billion less that the target set earlier so the government chose to increase the so-called sin tax, in line with Public Health Ministry policy, aimed raising community health standards.

Excise taxes on a number of alcoholic drinks have increased since Thursday, with the Finance Ministry expecting that the rise will enable it to earn about Bt6.3 billion more per annum.

Finance Minister Korn Chatikavanij has said that excise taxes for other products, including cigarettes, will also be increased in the near future as the ministry hopes to earn about Bt70 billion more.

“I want to reaffirm that besides increased excise taxed for these products, the government has no plan to raise taxes for others except for property and inheritance taxes as mentioned earlier, but it will take time as a law must be issued,” Mr. Abhisit said.

Plans to raise property and inheritance taxes were raised several times during previous administrations, but they were eventually scuttled because the increases would definitely impact wealthy persons owning land for speculative purpose.

Touching on the government’s decision last month to slash its budget outlay for Fiscal 2010 by Bt200 billion to Bt1.7 trillion, Mr. Abhisit said his government decided to lower the budget to avoid creating pressure on government agencies responsible for collecting taxes and causing trouble to small- and medium-sized enterprises.

After the reduction, which would happen for the first time in several decades in the past, the budget will suffer a deficit of Bt350 billion, he said.

Although the budget will be cut, the government still focuses on investment to boost the economy, Mr. Abhisit said. These projects include water management, transportation, polluted-free roads, public health and education.

-- TNA 2009-05-10

[animatic]

Sin taxes and transport taxes, some of the few things ALWAYS raised in times like this.

Because they are rarely purely discretionary.

Times get tough people drink, stiff gets moved and smokes smoke more.

No doubt this was needed, no matter how you cut a shrinking pie,

it STILL needs to go around to all the metaphorical 'mouths needing sustenance'...

No one likes it but the alternatives are usually MUCH worse.

[Oberkommando]

It was these kinds of policies that ensured the Democrats were unelectable for a decade in the aftermath of the economic crash with Chuan's hugely unpopular 'bitter medicine' policies.

In stark contrast with the Thaksin years where people were better off and prospered.

[pontius]

It certainly works, a few motercy drivers and their friends, who often hang out around my home, told me they reduced consumption because everything's "peng maag" now.

[sriracha john]

In stark contrast with the Thaksin years where people were better off and prospered.

Indeed, having cheap and toxic lao khao is often a sign of being better off and tremendous prosperity.

[HagenvonTronje]

Excise raise wouldn't heighten oil price

By: Bangkokpost.com

Published: 9/05/2009

Prime Minister Abhisit Vejjajiva said the raising of the oil tax would not affect prices at gasoline station, and this point would be ensured by the oil subsidization fund.

Asked whether the new bill on oil excise tax would raise excise by as much as 10 baht, the premiere said selling price ceilings and real price after tax increase would be separated. Consumers would not be adversely affected because mechanics of the oil subsidization fund would still be in place.

Energy Minister Wannarat Channukul said benzene and diesel prices would go up in proportion to the excise increase announced by the Ministry of Finance if no intervention is made, and results would be problematic in such case. To avert such circumstance he was having the oil subsidization fund reduce its drawing of money from oil sales, so retail prices at stations would not increase.

...

continue here

-- Bangkok Post 9/05/2009

[Briggsy]

How can an increase in excise on oil NOT increase pump prices?? Are they expecting the oil companies to stand the increase by decreasing their profit margin to negative levels?? The statement does not make sense.

Furthermore, when are they going to stop calling gasoline/petrol "benzene". I know it's "benzene" in Thai but in English benzene is a completely different solvent. Crap English, crap reporting, once again.

[Valentine]

It was these kinds of policies that ensured the Democrats were unelectable for a decade in the aftermath of the economic crash with Chuan's hugely unpopular 'bitter medicine' policies.

In stark contrast with the Thaksin years where people were better off and prospered.

Chuan inherited a financial disaster as the two previous governments of kept their heads in the sand too long totally ignoring or unable to do anything about the problems in the financial sector. I am sure there are many who made huge sums of money by changing their Thai Baht at 25 to the dollar prior to the devaluation. Lessons learned since then show that the IMF may not be the guiding light it was thought to be at the time.

Inceasing the sin taxes has always been an easy but not very creative way to raise extra funds & is used by governments all over the world. Huge sums of money could be saved by streamlining the civil service & at the same time making them more service orientated as they are supposedly servants of the public who pay their salaries. Corruption is a huge business & if say 50% of the corruption money could be channeled back to the public then Thailand would be a very prosperous country.

The price of cigarettes & alcohol do not bother me as I do not partake in either but it appears the increase in alcohol tax is very selective towards certain drinks. If some of the funds generated were used on an educational campaign to get people off smoking & drinking then huge gains would be made in other areas such as increased productivity, more harmonious family relations, less strain on the health system, etc.

[Thaddeus]

Plans to raise property and inheritance taxes were raised several times during previous administrations, but they were eventually scuttled because the increases would definitely impact wealthy persons owning land for speculative purpose.

Quel shock.

A Government spokesman was allegedly reported as saying "We'll get most of the money from the poor by taxing the things that they crave or need to survive, we can't tax our mates .... they throw the best parties"

Edited May 11, 2009 by Thaddeus

[loong]

It seems very strange that the government announced on SUNDAY, that they are considering increasing the tax on cigarettes.

This tax increase is already being charged - many places cigarettes went up by 8 to 10 Baht per pack on SATURDAY.

[animatic]

It was these kinds of policies that ensured the Democrats were unelectable for a decade in the aftermath of the economic crash with Chuan's hugely unpopular 'bitter medicine' policies.

In stark contrast with the Thaksin years where people were better off and prospered.

Chuan inherited a financial disaster as the two previous governments of kept their heads in the sand too long

totally ignoring or unable to do anything about the problems in the financial sector.

I am sure there are many who made huge sums of money by changing their Thai Baht at 25 to the dollar prior to the devaluation.

Lessons learned since then show that the IMF may not be the guiding light it was thought to be at the time.

Increasing the sin taxes has always been an easy but not very creative way to raise extra funds & is used by governments all over the world. Huge sums of money could be saved by streamlining the civil service & at the same time making them more service orientated as they are supposedly servants of the public who pay their salaries. Corruption is a huge business & if say 50% of the corruption money could be channeled back to the public then Thailand would be a very prosperous country.

The price of cigarettes & alcohol do not bother me as I do not partake in either but it appears the increase in alcohol tax is very selective towards certain drinks. If some of the funds generated were used on an educational campaign to get people off smoking & drinking then huge gains would be made in other areas such as increased productivity, more harmonious family relations, less strain on the health system, etc.

Exactly, government histories are littered with parties that took the bitter medicine needed

and then lost in the next election JUST as the regional recoverery THEY helped make happen arrived,

and then the following government took full credit for good times and set the conditions for a fall AGAIN.

Clinton gets the show together, Bush wrecks the whole shooting match more than anyone in memory,

then hands it to Obama, and still Republicans try to spin the blame to Clinton era,

anyone but Daddy Bush and Reagan. etc.

Those two previous Thai governments were hand in glove with Thaksin and his big plans.

Chuan inherited a bad deal and worked things out and took the heat for doing the right things.

Thaksin was MORE than happy to accept and play up ALL THE CREDIT.

Edited May 11, 2009 by animatic

[coconutmonkey]

It was these kinds of policies that ensured the Democrats were unelectable for a decade in the aftermath of the economic crash with Chuan's hugely unpopular 'bitter medicine' policies.

In stark contrast with the Thaksin years where people were better off and prospered.

disagree.... that's the way it looks.

[Tywais]

Furthermore, when are they going to stop calling gasoline/petrol "benzene". I know it's "benzene" in Thai but in English benzene is a completely different solvent.

Gasoline contains benzene. Why is it called gasoline when it is a liquid? Besides, not just Thailand uses the term.

"In Germany and some other European countries, gasoline is called Benzin (German), Bensin (Swedish), Benzyna (Polish), Бензин (Russian), and other variants of this word. The usage does not derive from Bertha Benz, who used chemist shops to purchase the gasoline for her famous drive from Mannheim to Pforzheim in 1888, but from the chemical benzene."

[DaleBlue]

Stop taxing the sinners, and start taxing the rich.

[fobuff]

Well Well Well

Somebody has to pay for the shortfall of tourists dollars (for hte reasons we know - yellow, red, etc shirts) and as usual that means every Noi, Nan, and Moo.

Fobuff

[skiman1]

Excise raise wouldn't heighten oil price

By: Bangkokpost.com

Published: 9/05/2009

Prime Minister Abhisit Vejjajiva said the raising of the oil tax would not affect prices at gasoline station, and this point would be ensured by the oil subsidization fund.

Asked whether the new bill on oil excise tax would raise excise by as much as 10 baht, the premiere said selling price ceilings and real price after tax increase would be separated. Consumers would not be adversely affected because mechanics of the oil subsidization fund would still be in place.

Energy Minister Wannarat Channukul said benzene and diesel prices would go up in proportion to the excise increase announced by the Ministry of Finance if no intervention is made, and results would be problematic in such case. To avert such circumstance he was having the oil subsidization fund reduce its drawing of money from oil sales, so retail prices at stations would not increase.

...

continue here

-- Bangkok Post 9/05/2009

Funny stuff - the Government are hilarious here

[loong]

Excise raise wouldn't heighten oil price

By: Bangkokpost.com

Published: 9/05/2009

Prime Minister Abhisit Vejjajiva said the raising of the oil tax would not affect prices at gasoline station, and this point would be ensured by the oil subsidization fund.

Asked whether the new bill on oil excise tax would raise excise by as much as 10 baht, the premiere said selling price ceilings and real price after tax increase would be separated. Consumers would not be adversely affected because mechanics of the oil subsidization fund would still be in place.

Energy Minister Wannarat Channukul said benzene and diesel prices would go up in proportion to the excise increase announced by the Ministry of Finance if no intervention is made, and results would be problematic in such case. To avert such circumstance he was having the oil subsidization fund reduce its drawing of money from oil sales, so retail prices at stations would not increase.

...

continue here

-- Bangkok Post 9/05/2009

Funny stuff - the Government are hilarious here

I can only imagine that this means that there is a price ceiling at the pumps and that if the oil price falls, the gov will take a larger slice in tax, so the pump price will stay the same.

It's the only way I can make any sense of this statement.

[ozsamurai]

In reality we see a hike of LM smokes from 49bht to 65 a 25% increase in one hit, still cheap compared to the west, thank god I don't drink beer! or it could really dent your budget.

[loong]

In reality we see a hike of LM smokes from 49bht to 65 a 25% increase in one hit, still cheap compared to the west, thank god I don't drink beer! or it could really dent your budget.

Is that at a 7-11 or somewhere where they will pass on the real increase with no excessive profiteering?

I have not seen any reports that there has actually been an increase in the tax on cigarettes, just that the government is considering it.

So does anyone know if they have increased the tax or is this 25% increase a case of the wholesalers jumping the gun?

As far as I remember all tax increases on cigarettes in the past have been 2 or 3 baht maximum.

[ThNiner]

Excise raise wouldn't heighten oil price

By: Bangkokpost.com

Published: 9/05/2009

Prime Minister Abhisit Vejjajiva said the raising of the oil tax would not affect prices at gasoline station, and this point would be ensured by the oil subsidization fund.

Asked whether the new bill on oil excise tax would raise excise by as much as 10 baht, the premiere said selling price ceilings and real price after tax increase would be separated. Consumers would not be adversely affected because mechanics of the oil subsidization fund would still be in place.

Energy Minister Wannarat Channukul said benzene and diesel prices would go up in proportion to the excise increase announced by the Ministry of Finance if no intervention is made, and results would be problematic in such case. To avert such circumstance he was having the oil subsidization fund reduce its drawing of money from oil sales, so retail prices at stations would not increase.

...

continue here

-- Bangkok Post 9/05/2009

Funny stuff - the Government are hilarious here

I can only imagine that this means that there is a price ceiling at the pumps and that if the oil price falls, the gov will take a larger slice in tax, so the pump price will stay the same.

It's the only way I can make any sense of this statement.

Some part of extra fee on gas is for Oil/Energy Fund (not sure of the exact english word). Abhisit said that the fund is now in a healthy state, so the govt would reduce its fee and increase the tax instead. As a result, the prices should stay the same, despite the higher tax. He said this on his Sunday show.

[ThNiner]

So actually it's already been explained in the article here.

Prime Minister Abhisit Vejjajiva said the raising of the oil tax would not affect prices at gasoline station, and this point would be ensured by the oil subsidization fund.

But it's not entirely clear there.

Edited May 12, 2009 by ThNiner

[loong]

Thanks Thniner,

funny that your short statement offers an explaination, and can be understood, yet a National newspaper is incapable of doing the same.

[Tilt]

Thanks Thniner,

funny that your short statement offers an explaination, and can be understood, yet a National newspaper is incapable of doing the same.

The state coffers are empty.

They are simply taking back what they had given away with the 2000 THB bribe.

[loong]

In reality we see a hike of LM smokes from 49bht to 65 a 25% increase in one hit, still cheap compared to the west, thank god I don't drink beer! or it could really dent your budget.

The local shop doesn't stock LM, so I usually buy Wonder in the village.

Wonder were 32 Bt/pack, but the village shop charged 35 Bt, so I was paying a little extra for the convenience, that was fair enough.

On Sunday the price for Wonder went up to 43 Bt/pack an increase of 8 Baht. The shopkeeper told me that the wholesalers had increased the price because of the tax hike.

I went out on the bike to blast some cobwebs today and bought some cigs at the 7-11 in the petrol station.

Wonder are still 32 Bt and LM are 49 Bt, so no increase there as yet.

[Tywais]

In reality we see a hike of LM smokes from 49bht to 65 a 25% increase in one hit, still cheap compared to the west, thank god I don't drink beer! or it could really dent your budget.

Kgrong Thip went from 45 to 50 Baht a 11% increase at the local mom & pop shop.

[Americanmade]

IN USA A 158% TAX HAS BEEN ADDED TO ALL SMOKE PRODUCTS (legal products)

ONE PACKAGE OF 20 CIGS NOW COST $5.35 IN MY AREA AND NEAR 8 us dollar A PACK IN NY.NY.

THIS TAX WONT HURT THAIS~ AS FEW THAIS EVEN SMOKE . (as in majority)

[george]

Update:

Thai govt raises tobacco, petrol taxes

BANGKOK: -- In an attempt to make up for an expected shortfall in tax collection during the current 2009 fiscal year which ends September 30, the Thai government increased excise taxes on fuel and cigarettes on Thursday, said Deputy Finance Minister Pruttichai Damrongrat.

Mr. Pruttichai said royal decrees which allow the government to raise the ceiling for excise taxes collected on tobacco and fuel products has come into force midnight Thursday.

Under the executive decree, the Finance Ministry initially raised the excise tax on fuel to Bt2 per litre. The tax hike will be levied on a gradual basis as the government will use the state-run Oil Fund mechanism to assist in softening the impact of the increase, said Mr. Pruttichai.

Currently, the excise tax collection on fuel is limited to Bt5 per litre which has already hit the ceiling. The royal decree helps push the ceiling up to Bt10 a litre.

Energy Minister Wannarat Channukul said his ministry would use the Oil Fund mechanism to curtail any sudden increase in the excise tax on fuel and the Bt2 per litre increase would be gradually achieved by two or three increments in the space of a month.

As global oil prices have begun to climb again Mr. Wannarat said his ministry has no plans to raise money for the Oil Fund which now stands at the maximum of Bt7 with cash reserves of about Bt25 billion, with payments outstanding amounting to Bt15 billion.

The subsidy taken from the Oil Fund to offset the Bt2 per litre hike in the fuel excise tax at one time will cost Bt5.4 billion.

The excise tax increase on tobacco will see prices of locally-made cigarettes increase by between Bt10-13 per packet while prices of those imported will rise between Bt15-17 a packet.

Thursday’s increase in excise taxes on fuel and cigarettes comes after the government last Thursday hiked excise taxes on alcohol.

Finance Minister Korn Chatikavanij has said that the tax increases on alcohol, tobacco and fuel will enable the government to earn about Bt70 billion.

The five-month-old government of Prime Minister Abhisit Vejjajiva is now eyeing increases in property and inheritance taxes to boost its coffers.

-- TNA 2009-05-14

[loong]

So the tax increase on cigarettes is from tomorrow the 15th May?

That definitely means that the wholesalers have been profiteering. Funny thing though, they seem to have mostly anticipated the amount of the increase spot on.

How did they know?

[MKAsok]

Just bought a pack of Marlboro Reds from the small shop outside my building - 83 baht, up from 63 baht a couple of days ago. Pretty steep increase in one hit. Not sure if 7-11 are charging similar yet.

[DaleBlue]

Good for those sinners who wanted to quit smoking/drinking.

Also why not tax the whore house as well? Ooops, I forgot. There is no sex business in Thailand. Just massage. Just ask the commerce mininster MaMaSan.