REVENUE STUDY Excise tax on cars and beer in line for change

Department in bid to improve efficiency

Excise tax levied on automobiles and beer may be revised and a new excise tax on cable television introduced, Sanit Rangnoi, director-general of the Excise Department, said.

The Excise Department is currently studying ways to revise its taxes, the outcomes of which will be proposed to Deputy Prime Minister and Finance Minister MR Pridiyathorn Devakula.

The revision is a part of the department's plan to boost its tax-collecting efficiency, close loopholes and increase the amount of revenues it collects. 

The scope of the study includes the possibility of changing tax rates and taxing items that are currently untaxed.

Sanit said the department needed to address the problem of vehicle tax, as it currently taxed the "ex-factory price", or manufacturer's price, which is different from the retail price. Auto-makers have taken advantage of this definition by selling cars to subsidiary companies at reduced prices in order to avoid paying full tax. 

In response, the department might introduce a new method for calculating vehicle tax based on the retail price, said Sanit.

"We might ask them to pay excise tax based on 80 per cent of the retail price," he said.

The department has already asked car manufacturers to pay tax based on 76 per cent of the retail price, but the request is not backed by any law.

Another controversial issue is beer tax. Boon Rawd Brewery, producer of Singha Beer, has long complained that its rival Thai Beverage, producer of Chang Beer, has been paying less tax than it should. This is because the department charges a higher rate of tax on "premium" products, resulting in Thai Beverage, which produces low-end products, paying less tax.

Sanit said that to resolve the issue, the department may set a tax rate for low-end alcohol products based on their alcohol content. However, it will continue to charge the same "ad valorem" rate on premium products. 

The department will also consider taxing new items such as cable TV, said Sanit. As cable TV is expected to become more popular in the near future, taxing it would secure a large amount of revenue for the government.

Sanit said he did not want to impose a pollution tax as that is the duty of local government. 

He did not agree with critics who want the department to abolish its tax on telephone services, saying it is not the department's fault that operators shift their tax burden on to phone users.

The department collects 10 per cent of cellular charges and 2 per cent of landline bills. Sanit claimed that this tax helped to curb telephone use among youths.

From : nationmultimedia
By : PLA
Date : Dec 6, 2006

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