Hike In Excise On Cigarettes And Liquor Backed: Thailand

[Kilgore Trout]

For cigarettes, the hike will see an increase of between Bt6 to Bt8 per packet of eight local and imported brands, Benja said.

Either this is a load or the tobacco companies have raised their prices as well.

Marlboro jumped from 78 to 90 per pack, a 12 baht increase

[metisdead]

An inflammatory post has been removed.

[Spellforce]

Excise Department Director-General Benja Louicharoen said after the tobacco excise duties on cigarettes were increased, that cigarette taxes rose to 87 per cent from 85 per cent based on the level of one baht per cigarette.

Applying the new tax rate based on volume, cheap cigarettes from neighbouring countries must pay more taxes by 10-13 baht per pack.

I suspect an huge confusion between pack & boxes: 1 box = 10 packs.

1 cheap pack = 45 bahts yesterday

Today increase of taxes 85 to 87%:

1 pack = 45 X (87/85) = 46.05 bahts

1 box of 10 packs = 460.5 bahts => increase of 10.5 bahts per box (or 1 baht per pack)

[LuckyLew]

Yup Marlboro up to 90 baht for 20

Still cheaper than back home .... by a long way

Have to also add, I cannot remember that last time the prices of smokes went up

Seems they were at 90 baht years

No complaints from me

[Spellforce]

Yup Marlboro up to 90 baht for 20

Back from 7-eleven, I confirm.

LM pack is now 66 bahts (+8 bahts) and price of whisky hasn't move yet.

[philw]

Yup Marlboro up to 90 baht for 20

Back from 7-eleven, I confirm.

LM pack is now 66 bahts (+8 bahts) and price of whisky hasn't move yet.

It's obviously all variable at this stage.

I just bought LM blue 60 baht, up from 58 at local 7/11.

[Barin]

Absolute madness that they tax it on a calculation of pure alcohol per litre.

?

Taking the pure alcohol is the only (and standard) way of doing it sensibly.

it is the alcohol that is taxable, not the other ingredients that go into making the drink.

Thailand's excise tax on alcohol is made up partly of a tax on the value of the product (ad valorem) and partly on the content of pure alcohol. I assume that the ad valorem part is calculated on the ex-factory price for the local product, on the CIF cost cost plus import duty plus VAT for the imported product – correction by somebody in the know is welcome.

De facto standard for excise tax calculation on domestic made alcoholoic beverages is only based on alcohol content although it is supposed to be decided in every case by the Excise Department officer if Ad Volorem option ia applicable or not. But in practice as far as I know they never use Ad Valorem scheme for demetsic alcohol, probably because there is a chance of falsification of factory cost (if a factory declares that the Ex Works price is lower than the actual price then the Excise Tax the factory has to pay is lower thus the product cost is lower and the potential factory revenue is increasing).

On the other hand for imported alcohol the Excise Tax is always calculated Ad Valorem, never by alcohol content.

The Ad Valorem basis in this case is the CIF price of the product.

Inclusive vs. Exclusive Taxing Issue on Alcoholic Beverages:

For imported alcoholic beverages, the imports duty is classified by HS 2204-2208 with the 60% Ad Valorem WTO bound rate. Both the imports duty and the excise tax on imported alcohol are based on the total value of the imported goods or Cost, Insurance and Freight (CIF) price according to Liquor Act 1950. The imported alcoholic beverages are subject to Ad Valorem or value excise tax rate with inclusive tax calculation unlike VAT. For instance, given nominal excise tax rate of 60 % for domestic producer, the importer would face the effective Excise Tax rate of 176.5% for the same alcoholic drink.

[jackr]

However, Mr. Thaksapon added that the prices of alcoholic beverages in Thailand are only half the price of those in foreign countries.

Would one be including those countries with trillions of dollars of GDP, superior service, complete infrastructure (including tip-top roads & rail services), real pay grades, free schooling, police that get paid, etc etc in that statement? This about sums up the mentality of some of these folk.

[seasia]

"For cigarettes, the hike will see an increase of between Bt6 to Bt8 per packet of eight local and imported brands, Benja said.

Cigarette hike 2% on average"

Bt6 to Bt8 per packet is more like 10-15%. Apparently this comes into force today - anyone been to the shops for some smokes? What was the price increase and brand? I am in Hong Kong for a few days, just interested to know how much I will have to pay when I get back.

And please don't turn this into another smoking haters thread, there are plenty of those where you can go and procrastinate.

L & M up 8 baht today.

All the old prices had been drawn across with new prices.( local Family Mart)

14 % increase.

[softgeorge]

"For cigarettes, the hike will see an increase of between Bt6 to Bt8 per packet of eight local and imported brands, Benja said.

Cigarette hike 2% on average"

Bt6 to Bt8 per packet is more like 10-15%. Apparently this comes into force today - anyone been to the shops for some smokes? What was the price increase and brand? I am in Hong Kong for a few days, just interested to know how much I will have to pay when I get back.

And please don't turn this into another smoking haters thread, there are plenty of those where you can go and procrastinate.

Australia increase the taxes on cigarettes/booze every year saying it will reduce the number of people smoking/drinking. Didn't work in all the previous years people still smoked and consumed alcohol. Now they have come up with a world 1st initiative to stop people smoking, plain packaging, cigarette companies can no longer put thier brand on packets which must all be the same plain pack. Apparently this will make people kick the habit. Now we have the Australian State of Tasmania with a new initiative to ban the sale of tabacco products..

Tasmania in bid to phase out tobacco sales - http://news.ninemsn....t-tobacco-sales

A little like phasing in Prohibition, people will still smoke and drink and the only thing it will do is benifit the black market. A lot of cheap booze and chop chop tobacco will be sold under the counter at less cost to the consumer.

The plain packaging is more designed to deter young people taking up smoking not necessarily trying to make current smokers to quit! And the law that Tasmania is trying to bring in is like prohibition and it would restrict persons that are born after the year 2000, Would make it ilegal to purchase tobacco products. So there targeting kids that are at the age of eleven now and kids in the future

The big tabacco companies have already warned Tasmania they will take them to court if they tried impose such laws. Restriction of trade.

[Maestro]

De facto standard for excise tax calculation on domestic made alcoholoic beverages is only based on alcohol content although it is supposed to be decided in every case by the Excise Department officer if Ad Volorem option ia applicable or not. But in practice as far as I know they never use Ad Valorem scheme for demetsic alcohol, probably because there is a chance of falsification of factory cost (if a factory declares that the Ex Works price is lower than the actual price then the Excise Tax the factory has to pay is lower thus the product cost is lower and the potential factory revenue is increasing).

On the other hand for imported alcohol the Excise Tax is always calculated Ad Valorem, never by alcohol content.

The Ad Valorem basis in this case is the CIF price of the product.

Thank you for clarifying this. The table in the OP misled me.

[apiwan]

"For cigarettes, the hike will see an increase of between Bt6 to Bt8 per packet of eight local and imported brands, Benja said.

Cigarette hike 2% on average"

Bt6 to Bt8 per packet is more like 10-15%. Apparently this comes into force today - anyone been to the shops for some smokes? What was the price increase and brand? I am in Hong Kong for a few days, just interested to know how much I will have to pay when I get back.

And please don't turn this into another smoking haters thread, there are plenty of those where you can go and procrastinate.

LM green gone up today from 58 to 66 baht , not the end of the world but

Everything's going up here :-(

[Thai at Heart]

De facto standard for excise tax calculation on domestic made alcoholoic beverages is only based on alcohol content although it is supposed to be decided in every case by the Excise Department officer if Ad Volorem option ia applicable or not. But in practice as far as I know they never use Ad Valorem scheme for demetsic alcohol, probably because there is a chance of falsification of factory cost (if a factory declares that the Ex Works price is lower than the actual price then the Excise Tax the factory has to pay is lower thus the product cost is lower and the potential factory revenue is increasing).

On the other hand for imported alcohol the Excise Tax is always calculated Ad Valorem, never by alcohol content.

The Ad Valorem basis in this case is the CIF price of the product.

Thank you for clarifying this. The table in the OP misled me.

It is staggeringly misleading.

[Barin]

Absolute madness that they tax it on a calculation of pure alcohol per litre.

?

Taking the pure alcohol is the only (and standard) way of doing it sensibly.

it is the alcohol that is taxable, not the other ingredients that go into making the drink.

Thailand's excise tax on alcohol is made up partly of a tax on the value of the product (ad valorem) and partly on the content of pure alcohol. I assume that the ad valorem part is calculated on the ex-factory price for the local product, on the CIF cost cost plus import duty plus VAT for the imported product – correction by somebody in the know is welcome.

Basically there are two different Excise Tax calculation methods, whatever of them yields the higher tax will be applicable. They are not applied together, only one of the methods will be used to calculate the Excise Tax.

• Ad Valorem tax method is based on the factory price before tax (for domestic products) or DDP Thailand price before tax (for imported products). The formula is: TAX = PRICE x RATE / (1 - 1.1 x RATE). RATE is 50% for distilled spirits and 60% for beer and wine (unchanged). For example if the factory price of vodka before tax (or DDP Thailand price before tax) is 100 Baht, Ad Valorem tax will be: 100 x 0.50 / (1 - 1.1 x 0.50) = 100 x 0.50 / (1 - 0.55) = 100 x 0.50 / 0.45 = 111 Baht. So the factory wholesale price should be (100 + 111 + Local Tax + Health Tax + PBS Tax) x 1.07 = (100 + 111 + 10 + 2 + 1.5) x 1.07 = 240 Baht.
  
• Specific Tax method is based on alcohol content. Today the rate for vodka and Lao Khao was changed from 120 to 150 Baht per litre of pure alcohol. The formula to calculate Excise Tax is: TAX = RATE x VOLUME x DEGREE / 100. Assuming the bottle volume of 0.75 litre and the strength of 40% ABV, TAX = 150 x 0.75 x 40 / 100 = 45 Baht.
  

As we can see the Excise Tax calculated by Ad Valorem method is greater than the one calculated by Specific Tax method.

Thus the Excise Tax for this product should be the above calculated Ad Valorem value of 111 Baht, and not the Specific Tax value of 45 Baht.

Although it is illegal but some producers or importers are probably underinvoicing the factory price and, which is more often the case, the CIF Thailand cost of the imported alcoholic beverages.

Otherwise it is hardly possible to have such low retail prices we are having today for many alcoholic beverages in Thailand.

Edited August 22, 2012 by Barin

[Barin]

Today I went to Tesco Lotus to check the new prices of alcohol.

I was very surprised to see that all the price tags remained unchanged, what's up?

Please see the pictures I took today in Tesco Lotus. Do you notice any change in the prices?

Edited August 22, 2012 by Barin

[Moruya]

I wonder how long it will be until they change the legislation that imposes a limit?

Someone has to pay for all the commitments. May as well be the revolting masses as this is the only tax they pay anyway

Looks like 2 days was the answer

[paymaster]

Now all those beer and wine drinkers going into cardiac arrest about huge price hikes can relax as apparently those two are unaffected by this latest grab. For now.

As for Lao khao, I thought that was the beverage of choice of a vast number of rural and poorer people, perhaps the main voter base of Puea Thai? That should be interesting.

On a petty note, the Scots do not produce whiskey, I believe that is the Irish and Americans product.

You certainly sent me rushing to the cupboard to see if your claim was correcrt. It wasn't of course. There, clearly labelled, was my bottle of "scotch". "Bell's Blended Scotch Whisky".Just edited the "Ë". Edited August 23, 2012 by paymaster

[bangkokheat]

"For cigarettes, the hike will see an increase of between Bt6 to Bt8 per packet of eight local and imported brands, Benja said.

Cigarette hike 2% on average"

Bt6 to Bt8 per packet is more like 10-15%. Apparently this comes into force today - anyone been to the shops for some smokes? What was the price increase and brand? I am in Hong Kong for a few days, just interested to know how much I will have to pay when I get back.

And please don't turn this into another smoking haters thread, there are plenty of those where you can go and procrastinate.

Australia increase the taxes on cigarettes/booze every year saying it will reduce the number of people smoking/drinking. Didn't work in all the previous years people still smoked and consumed alcohol. Now they have come up with a world 1st initiative to stop people smoking, plain packaging, cigarette companies can no longer put thier brand on packets which must all be the same plain pack. Apparently this will make people kick the habit. Now we have the Australian State of Tasmania with a new initiative to ban the sale of tabacco products..

Tasmania in bid to phase out tobacco sales - http://news.ninemsn....t-tobacco-sales

A little like phasing in Prohibition, people will still smoke and drink and the only thing it will do is benifit the black market. A lot of cheap booze and chop chop tobacco will be sold under the counter at less cost to the consumer.

bloody stupid, "australia the lucky country" Im lucky I got out when I did and so are all the manufacturers. Keep it up you political ozi morons, keep diluting peoples freedoms and financially raping, then go and sit on your thrones and look down at the devastation in denial

[maidu]

Doubtful the tax will apply to rotgut moonshine (40% alcohol) sold in most mom & pop stores throughout Thailand. Top Bananas in Bkk probably figure, "Well, if they're so pissed-in-their-pants drunk that they can barely hobble down the street, they can't be a political threat to us, can they?"

They drunk rabble can be useful, when they sober up a bit. Just pay them a couple hundred baht, put 'em on a bus to the big city, promise them a Red t-shirt and few bowls of rice with congealed pig's blood, .....and they'll do your bidding.

More like "Well, if they're so pissed-in-their-pants drunk that they can barely hobble down the street, they can't be a political tool for us, can they?"

I've never lived upcountry, so I can't profess to be knowledgeable on the drinking habits of Pheu Thai's main constituency....

But I'm curious: what portion of the distilled liquor consumed by those folks is likely the locally (village) made rot gut that presumably escapes all taxation vs. what portion is actually the commercial and taxed stuff purchased through stores???

I've sniffed the locally made rotgut which is sold willy nilly in most of Thailand's mom and pop stores. Being 40% alcohol, it smells like, .....well, alcohol. I've bought a bottle (40 baht) and used it to distill some herbs. Go to any average Thai village, and you'll see a portion of the population swaggering around in the evening, some with a wife nearby, ready to grab the guy by the ear and steer him home.

[GarryP]

Barin, the prices on the shelves will not go up until old stock, which was subject to the old rate, is cleared.

I know a few mom and pop shops who put up their prices at once despite the stock being old, however, I also know one or two who only put up the price for new stock. I use the latter shops even though I do not drink spirits or smoke.

[Ron19]

Doubtful the tax will apply to rotgut moonshine (40% alcohol) sold in most mom & pop stores throughout Thailand. Top Bananas in Bkk probably figure, "Well, if they're so pissed-in-their-pants drunk that they can barely hobble down the street, they can't be a political threat to us, can they?"

They drunk rabble can be useful, when they sober up a bit. Just pay them a couple hundred baht, put 'em on a bus to the big city, promise them a Red t-shirt and few bowls of rice with congealed pig's blood, .....and they'll do your bidding.

More like "Well, if they're so pissed-in-their-pants drunk that they can barely hobble down the street, they can't be a political tool for us, can they?"

I've never lived upcountry, so I can't profess to be knowledgeable on the drinking habits of Pheu Thai's main constituency....

But I'm curious: what portion of the distilled liquor consumed by those folks is likely the locally (village) made rot gut that presumably escapes all taxation vs. what portion is actually the commercial and taxed stuff purchased through stores???

I've sniffed the locally made rotgut which is sold willy nilly in most of Thailand's mom and pop stores. Being 40% alcohol, it smells like, .....well, alcohol. I've bought a bottle (40 baht) and used it to distill some herbs. Go to any average Thai village, and you'll see a portion of the population swaggering around in the evening, some with a wife nearby, ready to grab the guy by the ear and steer him home.

See this almost every day in front of our place.

[QED]

"For cigarettes, the hike will see an increase of between Bt6 to Bt8 per packet of eight local and imported brands, Benja said.

Cigarette hike 2% on average"

Bt6 to Bt8 per packet is more like 10-15%. Apparently this comes into force today - anyone been to the shops for some smokes? What was the price increase and brand? I am in Hong Kong for a few days, just interested to know how much I will have to pay when I get back.

And please don't turn this into another smoking haters thread, there are plenty of those where you can go and procrastinate.

Australia increase the taxes on cigarettes/booze every year saying it will reduce the number of people smoking/drinking. Didn't work in all the previous years people still smoked and consumed alcohol. Now they have come up with a world 1st initiative to stop people smoking, plain packaging, cigarette companies can no longer put thier brand on packets which must all be the same plain pack. Apparently this will make people kick the habit. Now we have the Australian State of Tasmania with a new initiative to ban the sale of tabacco products..

Tasmania in bid to phase out tobacco sales - http://news.ninemsn....t-tobacco-sales

A little like phasing in Prohibition, people will still smoke and drink and the only thing it will do is benifit the black market. A lot of cheap booze and chop chop tobacco will be sold under the counter at less cost to the consumer.

Smoking is a horrible habit that is a. much more addictive than drinking b. much more likely to causes serious health issues and c. costs the government a hell of a lot in medical treatment, from everything from general lung conditions to cancer. Add to that the effect of passive smoking and there is a huge reason to ban it/get rid of it.

It should be banned, I hate smoking and when other people smoke it affects me. When people drink it doesn't affect others.

As you obviously missed the last part of my post I have highlighted it in red for you

[QED]

Thanks all for the replies, seems the general concensus is Marlboro's are now 90 baht (15.4% increase). That sucks. Lucky I bought some duty frees in Hong Kong last night for 600 baht a carton

[billd766]

Thanks all for the replies, seems the general concensus is Marlboro's are now 90 baht (15.4% increase). That sucks. Lucky I bought some duty frees in Hong Kong last night for 600 baht a carton

I normally buy a carton (10 packs) at a time in my local 7/11 but this morning they would only sell 2 packs a day.

When I argued a bit they got the supervisor who was embarrased but confirmed it. I paid for them then asked as a new customer for 2 more.

Cannot was the reply.

I went next door to the Mom and Pop shop and bought them out of their stock. Onlt 2 packs as that was all they had.

I also bought a bottle of SangSom at 260 baht, up 25 baht.

Let's hear the cheers for the party of the poor.

Edited August 23, 2012 by billd766

[mufcsamui]

"For cigarettes, the hike will see an increase of between Bt6 to Bt8 per packet of eight local and imported brands, Benja said.

Cigarette hike 2% on average"

Bt6 to Bt8 per packet is more like 10-15%. Apparently this comes into force today - anyone been to the shops for some smokes? What was the price increase and brand? I am in Hong Kong for a few days, just interested to know how much I will have to pay when I get back.

And please don't turn this into another smoking haters thread, there are plenty of those where you can go and procrastinate.

LM Blue from 58bt to 66bt just less than 14%