Philip Morris’ Thai unit backs excise tax reform

By The Nation

 

PHILIP MORRIS (Thailand) says it supports excise tax reform that would introduce a recommended retail selling price and a mixed tax system in the country.

 

The cigarette manufacturer says the new system will help improve the country’s revenue collection in the long run.

 

Pongsathorn Ansusinha, the company’s director of corporate affairs, made the comments after the promulgation of the new Excise Act in the Royal Gazette Monday,

Pongsathorn said the reform would lead to the sustainability of the government’s revenue collection without the need for a tax increase in the immediate future.

 

“The new tax system which will allow for a mixed tax system, meaning levying both ad valorem tax and specific tax. This would prevent the problems from price under-declaration and help boost state revenue collection in line with the tobacco consumption control policy,” he said.

 

In 2015, the World Bank has issued a paper called “Ten Principles of Effective Tobacco Tax Policy” in support of a simple tax system.

 

It advised against an ad valorem tax, noting that is a more complex system and undermines the effectiveness of tobacco taxation as it opens a loophole for business to avoid tax burden by downshifting to produce and sell products of lower price.

 

Pongsathorn added that he was confident the new tax system would enhance Thailand’s economic strength and help bring the country’s tax system closer to international best practice.

 

“We would have to wait for the announcement of the implementing regulations to see what the effective tax rate would be, but the Excise Department has maintained the principle of revenue neutrality so as not to create additional burden to the consumers, which would help in the smooth transition to the new system,” he said.

 

Source: http://www.nationmultimedia.com/news/business/30309949

 

-- © Copyright The Nation 2017-3-22

it is sad to see so many young Thai's becoming addicted to tobacco...  Just a replay of what happened in the USA 30-50 years ago.  USA was so stupid to sign off on big tobacco deal.. they should have held out for actually health costs incurred for ever.