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InfoQuest

Deputy finance minister to boost tobacco extract research to create new products and make up for lost income of planters caused by tobacco consumption tax increase

September 06, 2019


Abstract : Mr. Santi Promphat, deputy minister of the Ministry of Finance (MOF), said that 100-plus tobacco planters from 7 provinces in the north and northeast reported to MOF that when the 2017 Consumption Tax Act takes effect on October 1, 2019, tobacco consumption tax will increase to 40 percent.

InfoQuest (September 06, 2019) --Mr. Santi Promphat, deputy minister of the Ministry of Finance (MOF), said that 100-plus tobacco planters from 7 provinces in the north and northeast reported to MOF that when the 2017 Consumption Tax Act takes effect on October 1, 2019, tobacco consumption tax will increase to 40 percent, which will cut tobacco purchasing amount in the coming two years by 50 percent. He has ordered Tobacco Authority of Thailand to formulate short-term and long-terms plans to tackle with the impacts of tobacco consumption tax increase on tobacco planters. For example, efforts can be made to identify new methods of income creation, and launch tobacco research to create new products, such as studying the special medical value of tobacco, or producing tobacco into agricultural products, liquid nicotine and fertilizer. Such measures will generate more added value for Thailand tobacco industry.

"Tobacco is a key cash crop in Thailand, and has been widely planted in the north and northeast of Thailand. Therefore, a clear development plan should be worked out to increase the added value of tobacco, and innovative technologies should be used to study the special components of tobacco with commercial use. At this point, Tobacco Authority of Thailand is working together with Maejo University, Kasetsart University and other educational agencies. They are studying the special use of chemicals extracted from tobacco, seeking to expand the marketing channel of tobacco products and cope with the changing international trade rules under the framework of WTO agreement," said Mr. Santi.

As for the suggestions of tobacco planters in adjusting the methods of levying tobacco consumption tax, such as changing fixed tax rate into progressive rate, or raising 5 percent each year, Revenue Department of Thailand and other relevant departments should be engaged in discussion. Besides, Thai government will help farmers in systematically planting other alternative crops, and explain to tobacco farmers why the tobacco consumption tax should be raised: first, the WTO international trade rules previously signed by Thailand should be followed; the measure is rolled out to discourage smoking and shape a healthy living environment.

What's more, MOF has ordered Tobacco Authority to move faster to recruit a new director general with qualification, expertise, capability and experience in marketing and in coping with global trade competition. The new director general is expected to lead Tobacco Authority to become an agency with innovation capability and innovation technology, develop new products besides cigarette, enhance cooperation with foreign cigarette brands, and expand foreign markets.

Source: InfoQuest, by Khara/ Tanawat / Rachada, translated by Xinhua Silk Road

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Keyword: tobacco consumption tax

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