BANGKOK, Thailand – Excise Department Director-General Pornchai Teeravej has confirmed that a proposed restructuring of excise taxes on alcohol and tobacco, including the removal of a 2% tax surcharge allocated directly to four funds, is not intended to benefit private businesses. Under the proposed structure, businesses would continue paying tax at the same overall rate. The government would instead increase the standard excise tax rate on alcohol and tobacco to replace the 2% surcharge, with all revenue sent directly to the national treasury.
Pornchai said the government would issue a ministerial regulation under the Excise Tax Act B.E. 2560 (2017) to implement the revised rates. The change would effectively convert the existing surcharge into standard excise tax without reducing the tax burden on businesses. The restructuring follows the government’s policy announced to Parliament on April 9, which calls for taxes collected from products with negative social impacts to be brought into the national budget system to maintain fiscal discipline.
Finance Minister Ekniti Nitithanprapas has instructed the Excise Department to prepare for the change. The department considers direct transfers to the treasury more efficient than routing revenue through funds before returning it to the state, as this would reduce duplicated procedures.
Under the new structure, four organizations and funds currently receiving sin-tax revenue outside the regular budget system would instead have to apply for annual budget allocations under the Budgetary Procedure Act B.E. 2561 (2018). They are Thai PBS, the Thai Health Promotion Foundation, the Older Persons Fund and the National Sports Development Fund.
The proposed amendment submitted by members of the Bhumjaithai Party is currently undergoing a public consultation process. As the legislation concerns state finances, the House of Representatives will have to refer it to the government for Cabinet consideration. The Finance Ministry and Budget Bureau will then prepare their opinions and propose the accompanying ministerial regulation, with the aim of bringing the changes into force in sequence.
