Bangkok: The Tobacco Wholesalers Association has voiced strong opposition to the proposed implementation of a single rate excise tax on cigarettes, citing significant potential impacts on various stakeholders and the country’s revenue. Mr. Thanin Hiranchote, President of the association, highlighted concerns that such a tax adjustment during an economically fragile period could pose challenges for consumers, retailers, and wholesalers.
According to Thai News Agency, Mr. Thanin warned that rapid tax hikes in the past have led to a surge in the illegal cigarette market. Consumers, deterred by higher prices, often turn to cheaper, smuggled goods, resulting in unfair competition for legitimate traders and reduced tax revenue for the government. Additionally, these illegal products pose public health risks due to their substandard quality.
The association fears that a single tax rate would lead to immediate price hikes, particularly affecting budget cigarette categories, and potentially decrease sales for legitimate traders while expanding the illegal cigarette market. This could undermine the government’s objective of increased revenue, as the displacement of legal products with illegal ones would diminish tax income and strain honest businesses.
To mitigate these impacts, the Tobacco Wholesalers Association has urged the government to delay the transition to a single tax rate and consider maintaining the current mixed tax structure. They recommend a gradual implementation of any necessary tax increases to align with the economic situation and minimize disruption for consumers and businesses.
Furthermore, the association calls for an accelerated crackdown on illegal cigarette networks, including e-cigarettes, to address revenue collection issues and ensure fair competition for traders. Mr. Thanin emphasized that without tackling the illegal cigarette issue, the single tax rate could exacerbate problems for both traders and the government, potentially leading to decreased tax revenue and a market dominated by illegal products.
In conclusion, Mr. Thanin expressed hope that the government will consider feedback from directly impacted businesses and base its tax policy decisions on real data to avoid economic and social repercussions while sustaining national revenue.