Bangkok: Cigarette traders are raising alarms over the proposal to implement a single tax rate on cigarettes, expressing fears that this move could lead to increased prices and a subsequent surge in illegal cigarette trade, potentially resulting in significant losses in government revenue.
According to Thai News Agency, the Tobacco Wholesalers Association has publicly opposed the excise tax plan, which aims to impose a "flat" cigarette tax. The association warned that such a plan could severely impact consumers, retailers, and government revenue, particularly in the current sensitive economic climate. They noted that previous patterns of sharp tax hikes have historically led to a rise in illegal cigarette trade, as consumers seek cheaper alternatives.
The association pointed out that a single tax rate would cause an immediate and sharp increase in the price of budget cigarettes. This would lead to decreased sales for legal traders and reduced tax collection for the government due to the expected influx of illegal cigarettes. In response, the association proposed three points for government consideration: delaying or reviewing the single tax rate, implementing any tax increases gradually, and seriously accelerating the crackdown on illegal cigarettes.
The association stressed that if illicit cigarette trade is not addressed first, the implementation of a single rate would have severe consequences for both the government and cigarette traders. They expressed hope that the government would consider input from cigarette manufacturers before moving forward with the policy.