Excise rejig to aid importers

The Excise Department will offer a 15% discount on the recommended retail price, the basis for excise tax computation, for luxury items or those not ubiquitously found on shelves, says the department’s chief.

The current excise tax structure, which went into force on Sept 16, 2017, has dealt a blow to some products, including wine, as some local manufacturers set their recommended prices far higher than imported ones, causing importers to be taxed more than they should be, said director-general Krisada Chinavicharana.

The Excise Department will then calculate the taxes for these products at 85% of the recommended retail price, which is considered to be the appropriate level, he said.

The tax-collecting unit is gathering how many products are suffering from the current tax structure, Mr Krisada said.

The current excise tax uses the recommended retail price to replace the ex-factory price and the cost, insurance and freight (CIF) values as the basis for excise tax computation to ensure that the levy provides a level playing field.

The change was aimed at creating a fairer system for manufacturers and importers after some businesses were found to have exploited the CIF system to understate their tax bills.

In another development, Mr Krisada said the Excise Department’s tax revenue collection for fiscal 2018 could fail to achieve the target, though the department has fully enhanced tax-collecting efficiency.

He blamed the excise tax for beer and oil, which is required to be remitted to the department 15 days after they are produced, for the revenue collection shortfall.

The tax from output for those items in September, the final month of the fiscal year, will be sent in October, a fact that is not taken into account when the revenue target is set.

Both items contribute 4-5 billion baht a month to the Excise Department, Mr Krisada said.

The Excise Department has attempted to enhance its tax collecting efficiency by adopting a measurement system for beer, alcohol and oil, as well as an IT system to reduce the use of official discretion, he said. Moreover, the department will standardise fines based on recommended retail prices in place of market prices.

From October 2017 to June 2018, the Excise Department amassed 419 billion baht — 82.9 billion or 1.9% less than targeted — driven by shortfalls in beer, fuel and liquor taxes of 16.7%, 4.8% and 8.7%, respectively.