Experts call for levelling of beer taxes

       Taxes on beer should be restructured to ensure fair competition and increase government revenue, say tax experts.
       Excise tax on beer is levied at three rates. Economy beers are charged at 16.50 baht per bottle, standard beers at 22.76 baht and premium beers at 23.38 baht.
       These tax brackets have been in place since August 2003 and were raised to current levels in the middle of this year,when excise tax on beer, whisky and brandy went up by 7-9%. Excise tax on local alcohol drinks now ranges from 39.2% to 78.7%.
       Bunchorn Songsamphant, a tax expert at the Excise Department, said higher excise tax had not reduced alcohol consumption as the government had expected because consumers switched to cheaper products such as white spirits,which are subject to a lower tax rate.
       "If the tax collection on all types of alcohol products were fairer, the government would benefit and earn more tax revenue," he said.
       For example, if the excise tax on economy beers, which account for 80% of the total beer market, rose to the same level as on standard beers, at 22.76 baht per bottle, the government would generate 21 billion baht more in taxes.
       Nipon Poapongsakorn, president of Thailand Development Research Institute, said the unequal tax collection had widened price gaps, increasing smuggling and hurting legitimate business. It is estimated 10,000 tonnes of alcohol are smuggled each year and 90% of community white spirits production pays no tax.
       Some imported beers also reportedly pay very low import duties, which has made them very cheap. Local beer producers have complained about this as creating unfair competition.
       Boonchuay Tongcharoenpulporn, a director of the Thammasat Foundation,approves of level tax rates because they would create fair competition."The problem is bureaucrats still favour complicated and multi-tiered taxation structures, especially on imported liquor, because this leaves room for personal discretion," he said.