BANGKOK, Oct 8 – Thailand Tobacco Monopoly (TTM) managers and workers are getting the jitters after a recent increase in excise tax slashed sales of locally-produced cigarettes by half.
TTM director Torsak Chotemongkol said he plans to discuss the new tax structure with the Excise Tax Department next week, but he claims that the new tax collection procedure will not deter smokers as originally desired.
Raising the tobacco tax from Bt1 to Bt10 per kilo is a 10-fold hike, he said, adding that the new tax structure requires TTM to pay Bt1,000 for a kilo of blended tobacco.
The increasing prices of cigarettes have deterred smokers from buying cigarette packets and they turned to roll cigarettes by themselves, he said.
Mr Torsak said the sales of raw tobacco have increased nearly seven times since 1993, indicating that there was no quality control of raw tobacco which is more dangerous to health.
After meeting with the Excise Tax Department, the TTM director will hold talks with the Public Health Ministry which spearheaded the new tax structure.
He said he will explain to the health ministry that the new measures sharply increased the prices of cigarettes but did not reduce consumption as intended by the ministry.
Mr Torsak said the sales drop will affect the monopoly’s financial contribution to the state, recorded at more than Bt50 billion last year.
Last month, Deputy Finance Minister Thanusak Lek-uthai–who opposed the higher taxation–said Thailand and Australia were the two countries which most stringently controlled cigarette distribution.
He claimed that cigarettes from neighbouring countries–particularly China–will easily flow into Thailand when the ASEAN Economic Community takes effect in 2015.
