Bangkok--31 Mar--Integrated Communication
Philip Morris (Thailand) Limited (or 'PMTL') expresses its full support for the excise tax reform that would introduce the recommended retail selling price and a mixed tax system with both ad valorem and specific tax, saying that the new system will help improve the country's revenue collection in the long run.
Mr. Pongsathorn Ansusinha, Director of Corporate Affairs, PMTL commented after the new Excise Act has been promulgated in the Royal Gazette on 20 Mar 2017 that the excise tax reform would lead to the sustainability of Excise's revenue collection without having to increase tax in the immediate future. "The new tax system which will allow for a mixed tax system, meaning levying both ad valorem tax and specific tax, would prevent the problems from price under-declaration and help boost state revenue collection in line with the tobacco consumption control policy."
In 2015, the World Bank has issued a knowledge brief paper called "Ten Principles of Effective Tobacco Tax Policy", which supports a simple tax system as it is more efficient while advises against an ad valorem tax as it is a more complex system in practice and undermine the effectiveness of tobacco taxation as it opens a loophole for business to avoid tax burden by downshifting to produce and sell products of lower price.
Mr. Pongsathorn added that he was confident the new tax system will enhance Thailand's strength and help bring the country's tax system closer to the international best practice. "We would have to wait for the announcement of the implementing regulations to see what the effective tax rate would be, but the Excise Department has maintained the principle of revenue neutrality so as not to create additional burden to the consumers, which would help in the smooth transition to the new system."