Thailand : Tax cut for wine flagged
Tax cut for wine flagged
31/03/2012
The price of imported wines will drop if Deputy Finance Minister Thanusak Lek-uthai has his way.
He has proposed a new method of taxing wine aimed at cutting imported wine prices and encouraging importers to pay tax.
He cited two current methods of calculating import duties on wine. One is taxing 60% of the value of each imported bottle, and the other is taxing at 100 baht per litre of 100% alcohol, which will vary by the alcohol content in each bottle.
The Excise Department uses the method that provides the highest tax value.
Mr Thanusak said the department gains more tax from the value method, as there are various grades of imported wines ranging from a few hundred baht to hundreds of thousands of baht each.
The high excise tax on imported wines makes retail prices too high, encouraging importers to avoid paying duties.
The Excise Department receives 1 billion baht from 7.9 million litres of imported wine declared yearly, which is far less than actual consumption.
The newly proposed import duty method is based on quantities of wine instead of considering the value of each bottle of wine.
"The lower import duty will encourage those illegal importers to enter the system," he said. "Once legal and illegal ones are priced not much differently, it is no longer worthwhile to do it illegally."
Some importers are also declaring import prices for wine that are cheaper than the actual value. "If we use the same tax rate on quantities, it would tax the imported wine at the same rate, either for the luxury or the cheap ones."
The change will boost wine tax revenue to the government from 1 billion baht to 4-5 billion baht.
bangkokpost.com
