24-2-2024 (BANGKOK) The Excise Department has rolled out tax reductions for alcohol and nightlife establishments, effective from Friday, aiming to invigorate tourism and domestic expenditure.
Director-General of the department, Ekniti Nitithanprapas, stated that the adjusted tax rates align with measures sanctioned by the cabinet on January 2, envisioning Thailand as a prominent tourism hub.
“The government aspires to create an ambiance befitting a tourist destination, positioning Thailand as a focal point for restaurants and eateries, providing consumers with alternatives and fortifying its pricing strategy. This is intended to stimulate more tourist spending and attract high-quality foreign visitors,” remarked Mr. Ekniti.
The ad valorem tax rate for grape wine and sparkling grape wine has been slashed from 10% to 5%, with the tax rate based on quantity (baht per litre per 100 proof alcohol) dropping from 1,500 baht to 1,000 baht.
For fruit wines, the ad valorem tax rate and the tax rate based on quantity have been lowered from 10% to 0% and 900 baht, respectively.
Local liquors (less than 7 proof alcohol) now have an ad valorem tax rate and a tax rate based on quantity reduced from 10% to 0% and 150 baht, respectively. Meanwhile, fermented liquor mixed with distilled spirits (over 7 proof alcohol) will have ad valorem tax rates at 10% and tax rates based on quantity at 255 baht.
Night-time entertainment venues, encompassing nightclubs, pubs, and bars, will see their ad valorem tax rate drop from 10% to 5%, effective from yesterday until December 31.
Mr. Ekniti emphasized that these new tax rates would translate into more affordable alcoholic beverages, fostering tourism and spending. The reduction in alcohol prices is viewed as a stimulus to entice foreign visitors to select Thailand as their travel destination.
The tax cuts for nightlife venues are provisional, extending until the end of this year, serving as short-term measures to aid operators impacted by Covid-19, as well as to rejuvenate domestic employment, he added.
Nevertheless, Thanakorn Kuptajitti, adviser to the Thai Alcohol Beverage Business Association, expressed that the benefits of the new tax cuts would be confined to a specific group of alcoholic beverage producers, as outlined in the announcement. Overall, these measures may not significantly encourage alcohol consumption, as the majority of people prefer fermented liquor, whisky, brandy, and beer, which are not covered by the new tax cuts.
Mr. Thanakorn suggested that the government could better boost tourism and spending by lifting the longstanding ban on alcohol sales from 2 pm to 5 pm daily. The current regulation, in place for over 50 years, poses challenges for eatery operators, particularly when foreign customers inquire about the restriction during these hours.
