B600bn revenue target within reach
The
Excise Department has expressed confidence that its revenue target of 600 billion baht for this fiscal year is reachable based on the country’s economic momentum.
Brighter economic growth prospects for next year will improve domestic consumption, said Krisada Chinavicharana, director-general of the department. The output of every carmaker is expanding, he said.
Thai economic growth will continue and accelerate to 4% next year, Mr Krisada said.
The Bank of Thailand’s Monetary Policy Committee recently raised its GDP growth forecasts for this year and 2018 to 3.8% from the 3.5% and 3.7% predicted in July, based on stronger-than-expected export figures.
The department’s revenue target of 600 billion baht is 7% higher than the fiscal 2017 revenue collection of 560 billion baht, which exceeded the target by 12 billion or 2%.
Regarding the department’s tax revenue collection after the new excise law is implemented, Mr Krisada said revenue fell to 11 billion baht during the first 10 days of October from 12 billion in the same period last year, as operators adjusted to the new tax structure.
The drop in revenue is expected to be short-lived and tax revenues are expected to normalise soon, said Mr Krisada, who took office on Oct 1.
Under the new excise law, the recommended retail price replaces the existing ex-factory price and cost, insurance and freight (CIF) values as a base for excise tax calculation. The change was aimed at creating a fairer system for manufacturers and importers after some businesses were found to have exploited the system to understate their tax bills.
Sugary drinks, cigarettes and most alcoholic drinks have higher excise taxes under the new law, which went into effect on Sept 16.
As for so-called sin taxes, which are applied to alcoholic drinks and cigarettes, the new excise rate takes into account both value and quantity, as opposed to the previous legislation that targeted either value or quantity, depending on which was higher.
With the new tax rates on liquor, 45% is based on the value and 55% on the alcohol content in compliance with calls from public health groups.
The tax on cigarettes is also based on both value and quantity. Cigarette packs priced 60 baht or lower face a 20% tax and those above 60 baht get a levy of 40%.