Govt tries to reassure foreign firms over tax 

Wisudhi said the government intended the new tax rates – to be announced on September 16 – will be revenue neutral. Businesses need not be worried, the deputy minister told a seminar hosted by the American Chamber of Commerce in Thailand yesterday.
Wisudhi took the time to meet with the leaders of foreign companies operating in Thailand amid uncertainty about the impact of the changes, which will also take effect on September 16.
He assured the business leaders that the tax changes are in line with international best practice and the government wanted to ensure fairness and a level playing field for both domestic producers and importers. 
The excise covers 15 products and four services. The calculation of the tax amount will be based on suggested retail price rather than current ex-factory, or CIF, price. 
Legislation enabling the change in the tax system has been passed by lawmakers, but the new tax rates will need Cabinet approval.
Producers and importers must declare suggested retail price and pay the tax owed before they can sell their products. Usually, retail price of a product is much higher than the ex-factory price, so many business leaders believe this would result in a higher tax payment on the part of the manufacturers.
If the suggested retail price of a product is deemed to be unrealistically low in order to pay less tax , tax officials can ask the manufacturer to pay a bigger tax amount.

The foreign business community fears it will be hit with an additional tax burden, causing an impact on businesses ranging from car manufacturing to the importing of wine. 
“We are yet to know the new tax rates and are worried about its implementation; businesses want certainty and predictability so we can plan our businesses, ” said Judy A. Benn, executive director of the American Chamber of Commerce.
She also said the US government is monitoring Thailand’s tax reform.
 Quentin Job, the managing director of Pernod Ricard Thailand, pointed to inconsistencies in tax treatment for the different categories of wine, with grape wine being subjected to a much higher tax rate wine made from other fruits.
He also took issue with premium wine being subjected to much higher rate in the current system. He said high-end wine could contribute to tourism industry if the prices are not too high because of the excise levels. A bottle of wine selling for more than Bt 600 is taxed at three times the rate of cheaper wines.
Nutthakorn Utensute, director of the planning bureau of the Excise Department, said the government had been mindful of the health issues associated with alcohol consumption. The high tax rates in this segment had contributed to a decline in the consumption of alcohol, he said.
His comment suggested that the tax on alcoholic beverages may be raised after the new system is introduced.
Nutthakorn said the new tax rates to be applied in the motor vehicle industry may be announced before September 16. Auto parts and cars manufactured in the free-tax zone might be more affected than others produced outside the zone, he said.
The Excise Department estimated its revenue this year to be Bt558 billion and rise to Bt600 billion next year, partly due to the new tax rates.