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Friday, May 24, 2024

Plans to lure wealthy foreigners via cuts to duty on alcohol and cigars

In an unexpected move the government is looking to slash duty on alcohol and cigars by 50% for a 5 year period. Patchara Anuntasilpa, director-general of the Customs Department stated that this reduction was a part of overall plan to revive the economy and attract wealthy foreigners and highly skilled professionals. 

This is in line with the government’s stated objectives to revive the economy which has been devastated by the COVID 19 pandemic.  The government recently outlined plans to attract over 1 million wealthy foreigners to Thailand, in the hopes of boosting the economy to around 1 trillion baht in 5 years from this measure.  

10-year visas are included in the benefits for approved visitors along with their spouses and children,, as well as simliar tax rates as Thai citizens and the right to ownership of property and land.

Patchara Anuntasilpa stated that only 30% of products would have the duty reduced, with details coming via ministerial regulations to be announced later.  In addition there is also an opportunity to revise their approach to duty on possessions and personal items of arriving and departing passengers.

However not all seemed delighted at this move, Roengrudee Patanavanicha, a researcher on tobacco control, was surprised by this announcement as she stated the arrival next month of a new excise structure, that would tax cigarettes at a flat rate of 40%, regardless of their retail price.  It is hoped that this new 40% excise structure would disincentivize smoking amongst teenagers.

Although others claim that with high tax prices, this would lead to illegal smuggling.  The Bangkok Post reports that she countered with “It is lax law enforcement, an inefficient tax system and intervention from the tobacco industry that contribute to the problem,”

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