Excise reform crucial to competitiveness, chamber says

According to a study in which the Board of Trade cooperated with the University of the Thai Chamber of Commerce, although excise taxes are a major source of government revenue, if they are too high they could damage the country’s competitiveness amid seamless trade. The tax structure should be reviewed, the study concluded. 

TCC vice chairman Chaiwat Maraprygsavan said the Finance Ministry should consider making tax reform a priority.

“Tax reform will help eliminate problems due to unfair trade [practices], and facilitate more trade growth. The key considerations for tax reform should be long-term benefits rather than high tariffs for the short-term benefit of the country,” he said. He pointed out that many countries had blamed Thailand for having high excise taxes, which they claim makes it less competitive. Moreover, the country needs to develop its tax-collection system to avoid duplication among government agencies and to create clear regulations. 

The Finance Ministry’s tax-reform plan will be submitted to relevant government agencies next Monday, and to the prime minister at the next meeting of the joint public-private standing committee.

Suggestions for tax reform include reviewing the objectives for excise collection to ensure fairness for all involved and synergising the work of the three departments responsible for tax collection, namely Excise, Revenue and Customs. The tax reform should focus on making private enterprises more competitive, as well as the country itself, under Asean seamless trade. The utilisation of tax revenue should also be reformed so that it creates the highest benefit for the country.

Kitipong Urapeepatanapong, chairman of the tax committee of the TCC, said tax reform would benefit all sectors of the country including the government, private enterprise and consumers for the long term.

The Finance Ministry should make tax reform a priority. This would result in more transparency for the tax-collection system as well as improve the country’s competitiveness, he said.

Products that bring in a lot of excise revenue include oil, cars, beverages (alcoholic and non-alcohol) and tobacco, which helped generate up to Bt432 billion last year.