Thailand: 2% Alcohol, Tobacco Tax Hike
Alcohol and tobacco are set to get more expensive in Thailand as the government approved a 2% increase on the tax of alcohol and tobacco.
The additionally raised funds will go to helping senior citizens in need and will become part of the Elderly Fund that the government also approved.
More specifically, the additionally raised tax revenue from the harmful substances will be used to increase the governmental monthly allowances for the elderly since the current rates are insufficient.
Currently, all Thai citizens over 60 years old can receive THB600-THB1,000 per month. The amount increases with increasing age but is not tied to a recipient’s personal income. After the tax increase, those registered specifically as as low-income earners should see an increase to between THB900-THB1,300 each month. Those that don’t specify that they have low incomes will still receive the old amount.
The additional tax revenue will be funneled into a separate fund from the rest of the Thai Health Promotion Tax, which currently tallies THB213 billion annually. More specifically, the government is already collecting about THB65 billion each year from tobacco sales, THB148 billion from alcohol sales.
The Thai Health Promotion Tax is currently 5.5% on the taxable items and is partially used to support The Thai Health Promotion Foundation, which got THB4.3 billion last year; ThaiPBS, which gets THB2 billion annually; and the National Sports Development Fund, which also got THB4.3 billion last year.
The new increase will set the total Health Promotion Tax at 7.5% and will go into effect in 2018 when the National Legislative Assembly enacts the legislation.