Thailand’s tax department has reduced levies on alcohol and nightclubs, following a government programme to boost tourism and increase tourist spending.
The Excise Department reduced tax rates on alcohol and nightclubs from 23 February to comply with measures approved by Thailand’s cabinet. The Bangkok Post newspaper reported, citing an Excise Department Director General Ekniti Nitithanprapas statement that this will help turn the kingdom into a tourist destination.
“The government hopes to create an atmosphere in line with a tourist destination, making Thailand a centre for restaurants and eateries by presenting consumers with alternatives and strengthening pricing strategies to encourage more tourist spending and attract more high-quality foreign visitors,” Ekniti said.
The ad valorem tax rate on grape wine and sparkling grape wine has been reduced from 10 percent to 5 percent, while the volume-based tax rate has been reduced from 1,500 baht to 1,000 baht.
The ad valorem and quantity-based tax rates for fruit wines have been reduced from 10 per cent to 0 per cent and 900 baht, respectively.
The ad valorem tax rate based on quantity for local liquors (less than seven proof alcohol) is reduced from 10 per cent to 0 per cent and 150 baht, respectively.
The ad valorem tax rate based on quantity for fermented liquors mixed with distilled spirits (more than seven proof alcohol) is 10 per cent and 255 baht, respectively.
From Friday until 31 December 2024, the ad valorem tax rate for nighttime entertainment establishments, including nightclubs, pubs, and bars, is reduced from 10 to 5 per cent.
For example, a 750ml bottle of wine with 12 per cent alcohol content is priced at a stated price of 1,000 baht. The tax on alcohol content would be 135 baht (0.75×12×1500/100) at a rate of 1,500 baht. On top of that, the excise tax (10 per cent of 1,135 baht) would be 113 baht, bringing the price of a bottle of wine to 1,248 baht. Under the new calculation, based on a rate of 1,000 baht and 5 per cent, the cost would be 1,145 baht.
Ekniti said the new tax rates would bring down the price of alcoholic beverages and boost tourism and spending as alcohol prices are used as incentives to encourage foreign travellers to choose Thailand as a tourist destination.
According to the excise department head, the tax cuts for night spots are a short-term measure until the end of this year to help operators affected by coronavirus restrictions get back on their feet and boost employment in the country.
However, Thanakorn Kuptajitti, adviser to the Thai Alcoholic Beverage Association, said the tax cuts benefited a limited number of alcoholic beverage producers.
Overall, the new tax measures do little to encourage alcohol consumption. The number of people drinking wine is limited, while most people drink fermented liqueurs, whiskey, brandy, and beer. According to Thanakorn, the new tax cut does not apply to these types of alcoholic beverages.
Thanakorn said the government would be better off lifting the ban on alcohol sales between 2 pm and 5 pm, which would actually boost tourism and increase spending.
The regulation suspending the sale of alcohol between 2 pm and 5 pm has been in place for more than 50 years and remains a problem for eatery operators. Foreign customers are perplexed and ask for explanations as to why they cannot order alcoholic drinks during this period.
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