Bangkok: Tobacco farmers and traders are urging the government to address the issue of illegal cigarettes and e-cigarettes before considering any increase in taxes. The Tobacco Wholesalers Association and the Thai Tobacco Curers, Cultivators and Traders Association have expressed concerns over the government’s plans to adjust the tobacco excise tax structure and implement new regulations on tobacco product components.
According to Thai News Agency, Mr. Thanin Hiranchoti, President of the Tobacco Wholesalers Association, highlighted the associations’ shared opinion that the government should reassess its approach to the tobacco excise tax structure and the principles of the draft ministerial regulation concerning tobacco product composition. The current tax structure has been in place since 2017 and aims to address farmer welfare, government revenue, public health, and the control of illegal cigarettes. However, the associations argue that it has led to a decline in market share and sales volume for Thai ciga
rettes, impacting tobacco farmers and wholesalers due to the rising price of legal cigarettes.
Additionally, the draft ministerial regulation seeks to limit the addition of flavorings to tobacco products, which is intended to reduce consumer numbers. Nonetheless, the associations believe this will not change consumer behavior, as consumers may turn to illegal flavored cigarettes that evade taxation and regulatory control. They argue that enforcing such regulations could inadvertently boost the market for illegal cigarettes.
Mr. Thanin emphasized that illegal cigarettes and e-cigarettes are increasingly prevalent, with their reach extending to younger demographics. He stated that the government should prioritize resolving the illegal cigarette issue to reduce the negative impact on market competition, the future of the Thai tobacco industry, and government revenue collection. Maintaining the current tax rate is crucial, as an increase could push the price of legal cigarettes from 72 baht to 80-90 baht per pa
ck, potentially exacerbating the problem.