Snap rise in excise tax on cigarettes could bring in an extra income of Bt10 billion
THE FINANCE Ministry’s Excise Department is targeting income generated from the excise duty on cigarettes rising from Bt60 billion in the last fiscal year to Bt70 billion this fiscal year, following yesterday’s announcement of a hike in the tax.
The effective excise rate has risen from 87 per cent to 90 per cent with immediate effect, increasing from Bt1 to Bt1.10 per gram of tobacco, the department said.
“Our policy is that we want to reduce [the number of] newcomers consuming tobacco,” Excise Department director-general Somchai Pulsawas said at a press conference.
The agency will also monitor the risk of cigarette smuggling from neighbouring countries now that the price of domestic packs of 20 cigarettes will rise by between Bt5 and Bt10 as a result of the duty hike, he said.
Somchai added that the department had kept the excise increase secret, including among producers, out of concern over hoarding prior to the effective date.
According to an investigation, this had been successful as no manufacturers were found to have hoarded products prior to the announcement, he said.
Meanwhile, in the first four months of this fiscal year – October to January – the Excise Department collected Bt3 billion more in tax from all sources than it had estimated, he added.
Finance Ministry spokesman Krisada Chinavicharana, who is also director-general of the Fiscal Policy Office, said at a press conference yesterday that the Cabinet meeting on Tuesday had approved a measure to promote the jewellery industry by exempting it from the collection of value added tax, and also making |jewellery sales subject to a with|holding tax of just one per cent.
Moreover, income from the sale of jewellery will not be combined with other personal income for the payment of personal income tax.
These measures would cut costs for the industry by about 2 per cent, he said, adding that this tied in with the target of increasing the annual value of Thai jewellery exports to Bt3.9 billion.
The Cabinet also approved extending the Bt15-billion policy-loan programme of the Small and Medium Enterprise Development Bank of Thailand to the end of June, Krisada said.
The original expiry date was the end of last month.
The policy loan for SMEs and start-up businesses offers a special interest rate of 4 per cent for the first three years.
The programme commenced last June and has to date approved loans worth Bt5.44 billion.
To support SMEs and start-ups further, the Cabinet also approved a proposal that the Vayupak Fund and Krungthai Bank jointly set up a joint-venture fund worth Bt3 billion to invest in such businesses.
The fund will be head by the Finance Ministry’s permanent secretary, the spokesman said.
