Tantivangphaisal P. Thaiger News. Thailand urged to adopt single cigarette tax rate to boost revenue: Experts warn Thailand’s flawed tax system fails to curb smuggling and smoking, urging urgent reform. 3 May 2025

https://thethaiger.com/news/national/thailand-urged-to-adopt-single-cigarette-tax-rate-to-boost-revenue

“Thailand’s current tiered tax system on cigarettes has been criticised by academics, who urge the government to switch to a single excise tax rate as the World Health Organisation (WHO) advised.

The existing system is said to neither reduce illegal cigarette sales nor increase state revenue nor deter new smokers.

Dr Roengrudee Patanavanich from Mahidol University’s Faculty of Medicine highlighted that the Excise Department is evaluating a new tax structure to replace the system in place for nearly four years. The current system imposes a 25% tax on cigarettes priced up to 72 baht to ease the financial burden on low-income individuals and a 42% tax on those costing more.

A flat tax of 1.25 baht per cigarette is applied, amounting to 25 baht per pack of 20 cigarettes. Despite this structure, cigarette tax revenue fell from 64.2 billion baht in 2021 to 51.24 billion baht in the previous year, marking the lowest in 15 years.

The shift from a single tax rate to a two-tiered system in 2017 coincided with a downturn in cigarette tax revenue, which had risen from 13.6 billion baht in 1990 to 68.6 billion baht in 2017. The national smoking rate decreased from 31% to 19.1% during the same period.

However, since introducing the two-tier system, the smoking rate has remained unchanged, and the Finance Ministry has not met its annual revenue target of 60 billion baht from cigarette taxes. Illicit cigarette sales continue to be a problem.

In a 2018-2019 analysis presented to the Excise Department, the WHO recommended that Thailand adopt a single 40% tax rate with an additional 1.25 baht per cigarette. The organisation argued that tiered tax rates do not enhance revenue for the Tobacco Authority of Thailand (TAOT) but benefit foreign cigarette companies by increasing their market share, leading consumers to opt for cheaper alternatives.

Dr Prakit Vathesatogkit, executive secretary of the Action on Smoking and Health Foundation, criticised the TAOT’s suggestion of implementing a three-tiered tax structure, calling it a backward move. He emphasised that other countries are transitioning to a single tax rate in alignment with the WHO Framework Convention on Tobacco Control.

He warned that a three-tiered system would result in TAOT-produced cigarettes being priced similarly to tax-evading illicit cigarettes and encourage the importation of cheaper cigarettes from abroad to compete with TAOT products, reported the Bangkok Post.
Dr Prakit stated that to address cigarette tax evasion effectively, the government should focus on strengthening measures against illicit cigarettes rather than reducing taxes or employing multiple-tiered tax systems, as lower prices would likely increase smoking rates.”

Note: Moving to a single cigarette tax rate would provide financial and health benefits to the Thai Government. Additionally, it would enable Thailand to meet obligations as a signatory of the World Health Organization (WHO) Treaty, the Framework Convention on Tobacco Control. Stephen Hamann