About a week ago, September 4 to be exact, the news broke that the Thai cabinet had approved an increase in liquor tax. In general, this means that all alcohol is going to become more expensive over the next year or so. Some of you may have even noticed the prices have already gone up around the country.
Before we look into this, I should mention that as of the writing of this article, the Finance Ministry hadn’t released the official figures and full details of the increase. This means that the numbers in this article are subject to change.
Right, so, let’s look into the changes. From what we know the increase focuses on two different aspects:
- Product value
- Alcohol content – also known as the effective tax rate.
These two aspects vary depending on the type of liquor i.e., beer, wine and hard liquor. Here is how the increases will affect each:
- Beer – The maximum tax will be 60% of the product’s value while the effective tax rate is now THB 300 per one liter of pure alcohol. Before the change the rate was THB 100 per one liter of pure alcohol.
- Wine – Wine with a product value of less than THB 600 will be exempt from the product value tax while product worth over THB 600 will be taxed at 36% of the product’s value. The effective tax rate was raised from THB 100 to THB 1,000 per one liter of pure alcohol.
- Hard liquor – Specifics have not been released, but prices are expected to rise 7-15%. The percentage increase will likely depend on the type and strength of hard liquor.
From what we can see, this is a double tax, which will likely be calculated separately and simply added onto the overall price of liquor. Stores and bars will likely just pass on the price increase to the customer.
What does all this mean?
What we do know for sure is that you will see an increase in costs across for all liquor, regardless of where it was produced. For bottles of beer, you can expect to see an increase of around THB 3-7 a bottle.
As of the writing of this article, the importers don’t actually know if there will be other increases specifically for imported liquor, but chances are high that as the amount of imported liquor available in Thailand increases, you will likely see tax increases applied.
Why increase taxes?
According to Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong the reason for the increase is, “Not aimed at boosting state revenue, but is aimed at reducing the number of alcohol drinkers.”
Will this increase actually reduce the number of alcohol drinkers? Probably not. Previous tax increases on alcohol in other countries have done nothing to really reduce the number of alcohol drinkers. Plus, when it comes to beer at least, most of us will be able to afford the increase.
What are your thoughts on this tax increase? Is it draconian or will it help? Let us know!
Wish of the week
Ok, I’ll be the first to admit that I had to look up what SkovbærHvede is. This wheat beer is definitely not for everyone, it pours a reddish, almost pink color and is a tad on the sweet side with a pleasant mouthfeel. If you like fruit beers this will be right up your alley, give it a try with a light meal or when you are feeling like something slightly sweet!