Transcript Taxation Strategy to Reduce Overall Alcohol Beverage and Contaminated Liquor Consumption

Taxation Strategy
to Reduce
Overall Alcohol Beverage and
Contaminated Liquor
Consumption
Dr.Bundit Sornpaisarn
Center for Alcohol Studies (CAS)
July 13th, 2005
ปริมาณจาหน่ายสุราในประเทศ
สถานการณ์ การบริโภคแอลกอฮอล์ ของ
สั งคมไทย แนวโน้ มการบริโภคแอลกลอฮอล์ พ.ศ. 2524 - 2543
แอลกอฮอลล์บริสทุ ธิต์ ่อคนต่อปี (ลิตร)
ไทย
20
ฝรัง่ เศส
15
เยอรมัน
10
อังกฤษ
5
สหรัฐอเมริกา
0
ญิ่ปนุ่
ปี พ.ศ.
ฟิ ลปิ ปิ นน์
• ปรับเป็ นปริมาณแอลกอฮอลล์บริสุทธิ์โดยประมาณ เบียร์ ไวน์ และสุ รากลัน่ มี แอลกอฮอลล์บริสุทธิ์เท่ ากับ 4.5%, 14% และ 42% ตามลาดับ
• จากฐานข้ อมูล WHO-alcohol consumption database
อันดับการบริโภคเครือ
่ งดืม
่ แอลกอฮอล์
ของประเทศไทย
อันดับที่
160
140
120
100
80
60
40
20
0
141
127
ปี 1998
111
ปี 1999
96
93
ปี 2000
58
30
8
5 3
5
Total
Beer
3
Wine Spirits
ประเภทเครื่องดื่ ม
Figure 1 : Injury and mortality rate (per 100,000 populations)
between 1984 and 2001
Figure 2 :Liver disease and cirrhosis mortality rate and
per capita consumption between 1977 and 2001
Figure3 : Thai consumption per capita of pure commercial
alcohol (for over 15s) and GDP per capita (1961 – 2000)
Issues

Objective of Raising Tax


Decrease Alcohol Consumption
or Increase Government Income
or Both
Important Principles

The Alcoholic Beverages’ Price should
be relatively lower all

No any beverages’ price decreased

Low Price Alcoholic Beverages should be
increased
Thailand Taxation System
on Alcohol
Thailand’s
Taxation on
Alcohol
•
Customs Duty [60%, 5%]
•
Excise Tax [Specific,
Ad Valorem Rate]
Local Tax [10%ET]
Health Tax [2%ET]
Value Added Tax [7%]
•
•
•
VAT
Excise
Tax
Lo
cal
VAT
Heal
th
Cost of Product
+Production Profit
Excise
Tax
Lo
cal
Heal
th
Customs Duty
C.I.F.
Alcohol Taxation in Thailand
based on the Liquor Act B.E.2493 (A.C. 1950)
Combination Rate (both Specific and Ad
Valorem Rate) and the applicable rate is
whichever is higher (“2 Chosen 1”)
2 types of Tax Rates
•
•
•
Specific Rate: a uniform rate based on the
volume of alcohol content
•
Ad Valorem Rate: a percentage of the value
of the product
Example of Specific Rate Application

Tax Value = Degree * Volume of Spirit in bottle *
Specific Rate

Special Blended Spirit 35 degree, 750 c.c./bottle,
Specific Rate 240 bahts / liter of pure alcohol

Tax Value
= 35% * 750/1000 * 240
= 63 bahts
“More (Health & Social) Harmful, More Tax”
Ad Valorem Rate Application

Excise Tax Value
= Selling Price at manufacture
* Ad Valorem Rate
Selling Price at
Manufacture
* BP 52.45 Bahts
* SP 115.99 Bahts *
ET 58.00 Bahts
Local
Tax
Before
Tax
Price
+
Excise Local
Tax
Tax
+
Before
Tax
Price
Excise
Tax
Exclusive
Rate
Inclusive
Rate
Inclusive Rate 50% =
Exclusive Rate 111%
“More Luxury , More Tax”
2 Chosen 1 of Thailand
Type of
Spirit
1. Local White Spirit
40 degrees 625 c.c.
2. Special Blended Spirit
35 degrees 750 c.c.
3. Imported Economy Wisky
35 degrees 700 c.c.
4. Imported Deluxe Wisky
43 degrees 750 c.c.
5. Local Beer-1
6.4 degrees 640 c.c.
6. Local Beer-2
6 degrees 630 c.c.
Tax Value
from
Specific
Method
Tax Value
from Ad
Valorem
Method
S : AV
(Time)
The
Actual
Tax
17.50 B
8.64 B
0.49
S 17.50
B
63 B
58.00 B
0.92
S
63 B
58.80 B
29.76 B
0.50
S
58.80 B
77.40 B
308.44 B
3.99
AV
308.44
4.096 B
14.95 B
3.65
AV
14.95 B
3.78 B
20.32 B
5.38
AV
20.32 B
Baht / Liter of Pure Alcohol
Comparison of Tax Cost
by Different Tax System
1000
800
600
400
200
0
2 Chosen 1
Specific
Method only
Ad Valorem
Method only
Types of Spirit
Keep 2 Chosen 1
Maximum Benefit from both
Specific : “More Harmful, More Tax”
Ad Valorem : “More Luxury, More Tax”
Because it is more than or equal to
Specific Method Only already
Current Excise Tax Rate and Legislative Rate
Specific Rate
Legis
lative
Rate
Ad Valorem Rate
Current % of
Rate Legisl
ative
Rate
Current
% of
Rate Legislative
Rate
Local White Spirit
400
70
17.5%
50
25
50%
Special Blended Spirit
400
240
60%
50
50
100%
Imported
Economy Wisky
400
240
60%
50
50
100%
400
240
60%
50
50
100%
Com. Fermented
Spirit
100
70
70%
60
25
42%
Local Beer-1
100
100
100%
60
55
92%
100
100
100%
60
60
100%
Imported Deluxe Wisky
Local Beer-2
Evolution of Alcohol Tax Rate
(Specific)
Type
2/1/1992 14/5/1994 26/7/1996 11/9/1996 15/10/1997 25/2/1998 29/3/2000 28/3/2001 22/1/2003-Now
Beer
100 100 100 100 100 100 100 100
100
Community Fermented Spirit 100 100 100 100 100 100 100 100
70
White Spirit
100 100 100 100 100 100 100 100
70
Special Blended Spirit
100 100 100 100 100 100 150 240
240
Special Spirit
100 100 100 100 100 100 150 240
240
Whisky
100 100 100 100 150 150 150 240
240
Evolution of Alcohol Tax Rate
(Ad Valorem)
Type
2/1/1992 14/5/1994 26/7/1996 11/9/1996 15/10/1997 25/2/1998 29/3/2000 28/3/2001 22/1/2003-Now
Beer
48 48 48 48 50 53 53 55
55
Community Fermented Spirit 20 20 20 20 25 25 25 25
25
White Spirit
28 28 28 28 28 28 28 28
25
Special Blended Spirit
28 28 28 28 28 28 35 45
50
Special Spirit
24 24 24 28 35 35 35 45
50
Whisky
24 24 24 28 35 35 35 45
50

Recommendation on Taxation
1.1 Keep 2 Chosen 1
1.2 Increase Alcohol Tax Rate up
to ceiling
Other Legislative Measures
2.1 Enforcement on Alcohol
Production Quality Control
2.2 Enforcement on Existing Laws and
Establish new Laws for Alcohol
Consumption and Consequences Control
2.3 Enforcement on Illegal Alcohol
Production Control
Conclusions
Increase Tax for
Decreasing Alcohol Consumption
Recommendation
 Keep 2 Chosen 1


Increase Tax Rate up to
Ceiling
Enforcement on

Production Quality
Control

Consumption and
Consequences Control

Illegal Production
Control
Results

Overall Tax / Price of
Alcohol Market
Increased

Consumption and
Consequences Decrease

Government’s Revenue
Increased
Thank you



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