Tourism push sees taxes slashed for booze, pubs
The Excise Department has cut tax rates for alcohol and nightlife venues, effective as of last Friday (Feb 23), in a bid to boost tourism and domestic spending.
Department director-general Ekniti Nitithanprapas said that the new tax rates are in line with measures approved by the Cabinet on Jan 2, which are intended to promote Thailand to become a tourism hub.
“The government hopes to create an atmosphere fitting for a tourist destination, make Thailand a centre for restaurants and eateries, presenting an alternative to consumers and bolstering its pricing strategy, in order to encourage more tourist spending and attract more high-quality foreign visitors,” Mr Ekniti said.
The ad valorem tax rate for grape wine and sparkling grape wine has now been reduced from 10% to 5%, while the tax rate based on quantity (baht per litre per 100 proof alcohol) for them has been reduced from B1,500 to B1,000.
To take a real-world example, if a 750ml bottle of wine has a declared price of B1,000 and alcohol content of 12%, the tax based on alcohol content would be B135 (0.75x12x1500/100) at the B1,500 rate.
The excise tax applied on top of that (10% of B1,135) would be B113, bringing the total price to B1,248. Under the new calculation, based on the B1,000 and 5% rates, the price would be B1,145.
The ad valorem tax rate and the tax rate based on quantity for fruit wines have been reduced from 10% to 0% and B900, respectively.
The ad valorem tax rate and the tax rate based on quantity for local liquors (less than 7 proof alcohol) have been reduced from 10% to 0% and B150, respectively, while the ad valorem tax rate and the tax rate based on quantity for fermented liquor mixed with distilled spirits (over 7 proof alcohol) are 10% and
B255 respectively.
The ad valorem tax rate for night-time entertainment venues, including nightclubs, pubs and bars, is reduced from 10% to 5% until Dec 31.
Mr Ekniti said the new tax rates would lead to cheaper prices for alcoholic beverages and boost tourism and spending, as alcohol prices are being used as stimulus measures to encourage foreign visitors to choose Thailand as their travel destination.
The tax cuts for nightlife venues are short-term measures, effective until the end of this year, to help operators affected by the COVID-19 pandemic get back on their feet as well as boost domestic employment, he said.
However, Thanakorn Kuptajitti, adviser to the Thai Alcohol Beverage Business Association, said that the new tax cuts will benefit only a limited number of producers of alcoholic beverages. The government should lift the ban on alcohol sales between 2pm and 5pm instead, as this would do more to help boost tourism and spending, he said.