2-1-2024 (BANGKOK) The cabinet has given its approval for tax cuts on alcoholic beverages, specifically targeting wine prices, as part of an effort to boost tourism in the country.
Officials have announced that the steep import tariffs on wines, which currently stand at 54% and 60% of the declared value, will be waived for a period of one year. Additionally, the excise tax on wine will be reduced from 10% to 5%, and for local liquor, it will be reduced from 10% to zero. These measures aim to support small-scale producers, according to government spokesperson Chai Wacharonke.
Furthermore, the excise tax on entertainment venues will be halved to 5% of gross revenue. This move is intended to assist operators who are still grappling with the lingering effects of the pandemic.
The tax revisions are expected to come into effect soon after a ministerial regulation is published in the Royal Gazette. They will remain in effect until the end of the year, as stated by Mr. Chai.
This announcement follows the recent extension of opening hours for entertainment venues by two hours, allowing them to operate until 4 am in Bangkok and other major tourist destinations. Interior Minister Anutin Charnvirakul is also considering expanding the extended hours to other locations.
The loss in tax revenue resulting from these measures will be offset by the anticipated increase in tourist spending, according to Lavaron Sangsnit, the permanent secretary of the Ministry of Finance.
Tourism plays a crucial role in the second-largest economy in Southeast Asia. Government data from last year shows that the country successfully achieved its target of welcoming 28 million international tourists, generating 1.2 trillion baht.
For 2024, the government aims to attract more than 34 million foreign arrivals, as stated by Mr. Lavaron.
In the fiscal year 2023, which ended on September 30th, the Excise Department collected 177.6 billion baht in taxes from alcohol, beer, and other beverages. This figure included 64.17 billion baht from alcoholic beverages, 86.5 billion baht from beer, and 26.95 billion baht from other beverages.
Currently, the excise tax structure for wine is divided into two tiers. Wines priced above 1,000 baht are subject to a 10% tax, while wines priced below 1,000 baht are taxed at a zero rate.
However, the excise tax is also calculated based on the volume and alcohol content. All wines, regardless of price, are subject to a tax rate of 1,500 baht per liter for every 100 degrees of alcohol content. This rate has now been reduced to 1,000 baht.
Local liquor is subject to a separate excise tax based on volume, which remains unchanged at 150 baht per liter for every 100 degrees of alcohol content.
The Move Forward Party has been vocal in its support for small-scale local brewers and distillers. They argue that the current tax and regulatory framework creates barriers that prevent all but a few large players from competing effectively. To address this issue, the party has proposed a Progressive Liquor Bill, which aims to remove some of the obstacles in the current laws.
