Increase In Thailand’s Cigarette Tax Met With Uproar

Insurance

A proposal to increase the price of cigarettes in Thailand by 1-2 baht per packet has been met with uproar, as many critics are saying that the increase in pricing will not actually accomplish its goals, which is to up the country’s Health Insurance Fund for the health insurance in Thailand as well as not actually getting many people to give up the habit.

Thailand’s Ministry of Finance are behind of the increase in taxing, of Bt1-2 per packet, with the aim of increasing the income of the Health Insurance Fund. On October 1, the Ministry proposed the increase, with its officials saying that it will learn to earnings of about Bt3 billion (US$92,600) annually.

Many are disagreeing with the proposal, like the officials at the Excise Department saying that the tax collected to benefit the Health Insurance Fund and the health insurance in Thailand should not only come from cigarettes alone, but from the sin tax, which also covers alcohol and alcoholic products.

Others argued that if the new tax on cigarettes was implemented, it would hit cigarette entrepreneurs, in particular the Tobacco Authority of Thailand. Back in Sept. 16, 2017, a cigarette tax was implement which cut down profits from 80% to 60%, which only gives 1 baht per pack, instead of 7 baht.

Back in 2017, the Tobacco Authority of Thailand made Bt9 billion in profit, but that may drop by Bt1 billion in 2018, and they might not make a profit in 2019, which may lead to tobacco farmers suffering. According to their officials say that, currently, the tax on cigarettes sat at 1.20 baht per cigarette and 20% of the price of cigarettes, never over 60 baht. Meanwhile, cigarettes that sell for more than 60 baht a pack are taxed by 40%.

Thailand joined the WHO Framework Convention on Tobacco Control back in 2005, banning smoking in indoor public places, workplaces, public transport, and outdoor areas like exercise facilities, public parks, amusement parks, as well as children’s playgrounds and markets.

However, based on the price of the worldwide Malboro brand, Thailand is still pretty loose. The AU charges US$19.40 per pack, while the UK is at 5th, with every pack costing US$12.25 per pack. Meanwhile, in Thailand, a single Malboro pack costs a mere US$3.77.