Excise tax to be levied on retail prices, not low 'ex-factory' rates
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The Excise Department plans to amend laws as a means to levy excise taxes on "retail prices", instead of ex-factory prices, after finding some businesses understated prices.
The move comes after the National Council for Peace and Order’s announcement of its roadmap for economic and tax reform, which is one of the most challenging tasks that the ruling junta led by Prime Minister General Prayuth Chan-ocha faces.
The excise tax is considered the country’s second biggest source of income after the revenue tax.
The top five industries paying most excise tax in the fiscal 2013 budget were vehicles (Bt154 billion), beer (Bt69 billion), tobacco (Bt68 billion), fuel/oil (Bt64 billion) and liquor (Bt53 billion).
Somchai Poonsawat, the Excise Department director-general, said that up to now, ex-factory prices were used for excise tax calculation on all products, excluding liquor and beer, but the department would amend seven laws and combine them into one in a final excise tax draft.
The seven laws consist of the Liquor Act, Tobacco Act, Playing Card Act, Excise Tax Act, Excise Tariff Act, Allocation of Excise Tax Act, and the Allocation of Liquor Tax Act.
“The legal amendment aims to have a fair, transparent and internationally standardised excise tax structure through adjustment of excise tax calculations,” he said.
Earlier, the Excise Department asked Thammasat University to conduct a study on improving excise tax collection for the whole system. Then related parties were invited for talks and a working committee was set up to study the issue.
“We expect to finalise the study soon and will disclose the result of an excise tax amendment,” Somchai said. He insisted the legal amendment would be made without any impact on consumers. Under the new draft, the Excise Department will be authorised to inspect business operators’ retail prices. The department said business operators usually give ex-factory prices as a low-level base for tax calculation, while actual retail prices were high. Observers said the burden of taxes would be eventually pushed on to the products’ prices.
