THAILAND
Tobacco farmers are calling on political parties to help ease the impact of the 40% excise tax rise on cigarettes that is scheduled to come into effect October 1 this year.
Songkran Pakdeejit, president of the Burley Tobacco Farmers Association of Phetchabun, met with representatives from five political parties to discuss the effect of the new tax rate on tobacco farmers. Under the current excise tax structure, cigarettes are liable for tax both in terms of volume and value, regardless of price. The tax based on value is divided into two rates or 20% of suggested retail price for cigarettes priced below THB60.00 per pack and 40% for those priced more than THB60.00.
Once the new tax comes into effect, tax for cigarette packs priced THB60.00 or lower will increase to 40%, or the same rate applied to packs priced above THB60, leading to an increase in retail prices. The Association expects the retail price to increase by THB30.00 per pack
According to Pakdeejit, around 50,000 households of tobacco farmers in the north, northeast, and upper central regions are already struggling with the cigarette tax rate that increases every year. He also said the higher prices and subsequent drop in sales would affect the cigarette production and sale volume of the state-run Tobacco Authority of Thailand (TAOT) that would reduce the quota of tobacco they buy from farmers.