InfoQuest, (Sept. 9, 2019) -- Mr. Nutthakorn Utensute, director general of the Consumption Tax Department of the Revenue Department of Thailand, revealed that a second round tax increase will be imposed on sugared beverages from October 1, 2019. The tax increase on sugared beverages is adjusted once each two years. Tax will be doubled for that not reducing sugar content.
The first round of tax increase on sugared beverages started from September 16, 2017. Then it was found that only the beverage producer of one brand has reduced sugar content to pay less consumption tax, and other enterprises chose to offer new products with lower sugar content to avoid impacts on their products already on market.
Currently, the tax revenues of the Revenue Department from sugared products is 2-3 billion baht each year. The second round of tax increase will take effect on October 1, 2019, which will add about 1.5 billion baht tax revenue to the Revenue Department. That means 3.5-4.5 billion baht of tax revenue from sugared beverages. In 2019 fiscal year, the total tax revenue of the Revenue Department is 584 billion baht, and its target tax revenue in 2020 is 640 billion baht. The Revenue Department is confident that the target can be delivered.
Besides, the Revenue Department plans to negotiate with other relevant working groups and departments, such as the Ministry of Public Health and Thailand Food and Drug Administration, to co-monitor enterprises in adding sugar content warning sign. The signs should be more visible like health warning sign in cigarettes. All those will become standards to review tax preference. Yet further discussion should be made on specific steps, principles, and methods.
To make survey over the results of the first round tax increase, the Revenue Department and the academic service center of Chulalongkorn University have made a joint investigation over people's recognition of tax increase on sugared beverages. The results showed that the number of enterprises showing the sugar content of beverages and adding signs has increased from the previous 60-70 to 200-300, up 200 percent. But the degree of people's recognition is not high. Those with higher recognition degree are age groups below 30 and above 60. Those of working age showed fewer interests in the issue and still consumed beverages with high sugar content.
"Private sector has become used to tax collection based on sugar content, and learned from meetings the intention of the Revenue Department in improving people's health. It was stressed that the price rise of beverages in recent days was caused by cost changes, rather than costs caused by tax," added Mr. Natthakon.
Source: InfoQuest, by Khru / Tanawat / Rachada, translated by Xinhua Silk Road
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