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Excise Dept planned to close loopholes of Alcohol tax

The head of the Excise Department revealed plans to restructure the excise tax structure on wine and beer, with the goal of closing existing tax loopholes.

According to Ekniti Nitithanprapas, a formal conversation with the private sector is underway to secure a fair and appropriate tax system.

Furthermore, despite the recent tax restructure from factory-based pricing to retail sales-led calculations, many new beverage arrivals on the market, including beers without alcohol, are theoretically falling through the gaps of taxation, according to Ekniti.

These loopholes allow these goods to be taxed as non-alcoholic beverages.

Concerns have been raised about a growing trend in the Thai market: Korean soju.

The fermented spirits tax class is just 10% for the multi-process alcoholic drink that involves both fermentation and distillation.

In comparison, the substantial 20% tax on distilled spirits, with the exception of rice whiskey, falls short. According to Ekniti, the relatively low tax rate feels inappropriate for such drinks.

Consider the case of zero-alcohol drinks. They may fall into the alcohol category but suffer little or no tax because they are non-alcoholic.

The path to these changes will necessitate collaboration with relevant public and private sector bodies, notably the Ministry of Public Health.

Ekniti emphasized that the purpose of this tax revision is to reach a fair conclusion that balances the interests of all parties involved.

Ekniti guaranteed that ongoing tax evasions will be addressed as a result of the present overlapping and potentially exploitable beverage tax regime.

As a result, the department is preparing to revise the ministerial laws in order to prevent impending trends and handle the situation at hand, according to the Bangkok Post.

It is crucial to remember that these types of taxes are among the Excise Department’s primary sources of revenue. The department earned 599 billion baht in income for the fiscal year 2022.

Beer was the third most profitable tax after fuel and autos, providing an astonishing 85 billion. With 59.2 billion, alcoholic liquor came in fourth position.

More public involvement will also be sought in the monitoring of liquor and beer tax payments.


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