Sep 5, 2013
Thai alcohol excise tax update with details - PART TWO
It seems to me that wholesalers affect the taxes more now as their prices will determine the taxes paid by the brewers. While this has caused business operators much grief, Mr. Somchai from the Excise Department believes the new rates will increase the competitiveness of local producers against importers.
As a consumer, it must be pretty confusing to see all the complex levels of taxes and new changes, and it would be simpler to just feel annoyed and then wait to see the new price labels at the store.
As my last post focused more on beer, I shall take a look at the impact on white spirits here, which also happens to be part of the strongest business segment in Thai Bev.
At a glance, it seems the alcohol taxes are not evenly imposed, whereby some beverages are taxed more than the other. For one, imported wines are probably going to become much more expensive.
On the other hand, white spirits as compared to the others, such as beer, is only taxed 4% of wholesale price as the Value-based Tax, and is also pretty close in the bracket for Content-based Tax.
To begin with, all of the brown, white and other types of spirits in Thai Bev's lineup, have only 40% or less of alcohol content by volume, which will avoid the Extra Charge. Also note that the 4% Value-Based Tax on white spirits used to be 50% earlier! The Content-Based Tax is set at 145 baht/litre/100% alcohol for now, with the ceiling at 400 b/l/a.
Lets take for example a 660ml bottle of Chao Phraya white spirits, with 40% abv. The content-based tax works out to about 36.25 baht, with the only other unknown, last wholesale price to be taxed at 4%.
I do not intend to speculate but my opinion is that after all the noise has died down, Thai Bev will benefit from this via its white spirits/spirits brands.