The logic of the asylum!

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Owld Feller
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The logic of the asylum!

Post by Owld Feller » March 4, 2017, 2:54 pm

Following the increases in alcohol/tobacco taxation last year the Excise Department were surprised to find that their revenues fell, in the first quarter of 2017 by 5.8 billion baht, because of lower demand.

Their solution?

Substantially Increase the rates again!!

The proposals look like this - only details about the following alcoholic beverages have been released so far.


Beer

3.5% and under – From 41.60 baht a bottle (620ml) to 78.50 baht

5% – From 42.10 baht a bottle (620ml) to 108 baht

5.8% – From 40.70 baht a bottle (620ml) to 123 baht

6% – From 40.20 baht a bottle (620ml) to 132 baht

7% – From 46.50 baht a bottle (620ml) to 178 baht



Whiskey

35% – From 160 baht a bottle (700ml) to 312 baht

40% up – From 216-366 baht a bottle (700ml) to 357-447 baht



Rice Whiskey

28% – From 98 baht a bottle (625ml) to 199 baht

35% – From 121 baht a bottle (625ml) to 244 baht



Wine

12.5 – 14.5% – From 225 a bottle (0.75cl) to 519 baht

Maximum tax value of 1,482 baht

They are, though, getting their excuses in early to 'save face' when they realise the error of their ways.

Despite tax increases of up to 150%, Khaosod has reported that the Excise Department, responding to negativity online regarding the tax hikes, say that they don’t expect all brands to be subjected to the full tax increase. They claim each type of alcohol will be evaluated individually before being subject to tax changes. They also claimed that the price of wine will actually fall – despite it being taxed more.

The new tax increases will roll-out over the next 180 days.

It reminds me of a story relayed by a friend, dating back about 5 or 6 years, when he was booking a return flight from BKK to London and discovered that Thai Airways (after complaining about a 26% cabin occupancy) decided to bring their profits in line with forecast by increasing their cheapest economy return ticket to 100,000THB!

He politely declined and travelled with SriLankan Airlines instead for 25,000THB!

I just had a quick search and it appears that Thai will now provide a return for about 40,000THB.



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stattointhailand
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Re: The logic of the asylum!

Post by stattointhailand » March 4, 2017, 5:05 pm

To be fair that is no different to the banking industry logic ............

If you have plenty of money/security you can have a loan ........ if you need a loan coz you havent any money you cant have one #-o

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vidmaster
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Re: The logic of the asylum!

Post by vidmaster » March 4, 2017, 6:54 pm

T I T

jai yen yen
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Re: The logic of the asylum!

Post by jai yen yen » March 4, 2017, 11:16 pm

It is Thai logic, the same with hotel rentals and what not. The Thais have their way and you can't tell them different. I remember when my house was being built in Hua HIn, they were placing the concrete for my driveway but instead of starting at the far end they would dump the concrete closest to the road, finish it nice and smooth then run the wheel barrow through it dump some more and refinish it again until they reached the far end. I suggested they start at the far end and work back but they just smiled and carried on their way, Farang ting tong.

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Re: The logic of the asylum!

Post by Lone Star » March 5, 2017, 7:24 am

stattointhailand wrote:To be fair that is no different to the banking industry logic ............

If you have plenty of money/security you can have a loan ........ if you need a loan coz you havent any money you cant have one #-o
In order to make good loans, it's probably a good idea that the borrower has the ability to repay. :-" After all, the bank is lending money deposited by others. :)
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Re: The logic of the asylum!

Post by skinner » March 5, 2017, 12:00 pm

I can not see this happenig at THESE rates. Tourism is a big revenue earner, and if Thailand becomes known as an expensive place to drink , backpackers will spend less time here ( and less money) sex tourists likewise. Two huge markets affected.

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WizzWanger67
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Re: The logic of the asylum!

Post by WizzWanger67 » March 5, 2017, 12:17 pm

skinner wrote:I can not see this happenig at THESE rates. Tourism is a big revenue earner, and if Thailand becomes known as an expensive place to drink , backpackers will spend less time here ( and less money) *** tourists likewise. Two huge markets affected.
skinner i can see were your coming from and agree with you......But part of me thinks this can and will happen simply because this is thailand :D

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Re: The logic of the asylum!

Post by Asiaphile » March 5, 2017, 12:56 pm

skinner wrote:I can not see this happenig at THESE rates. Tourism is a big revenue earner, and if Thailand becomes known as an expensive place to drink , backpackers will spend less time here ( and less money) *** tourists likewise. Two huge markets affected.
I too agree that the whole idea is silly but, as noted above, TIT so don't hold your breath.

However, I don't agree with your arguments. The impact by backpackers will only be a drop in the ocean. The majority of tourists coming to Thailand is Asian. They generally like to gamble but drink moderately, hence Prayuth's wish to allow casinos in Thailand.

The number of western tourist combined (Europe, America, Australia) was only about 15% last year, and how many of these were backpackers?
Besides, Thailand has repeatedly indicated that they want to move away from being a cheap holiday destination and aims at attracting more big spenders, so the loss of backpackers will only be seen as a bonus.
Last edited by Asiaphile on March 5, 2017, 1:06 pm, edited 1 time in total.

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Barney
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Re: The logic of the asylum!

Post by Barney » March 5, 2017, 1:04 pm

How does this tax work?
Per bottle?

How can I be paying 50 to 60bht a bottle of large chang in a Thai restaurant and the tax is 108.
Is there something my simple brain is missing in the calculation.

Beer

5% – From 42.10 baht a bottle (620ml) to 108 baht

5.8% – From 40.70 baht a bottle (620ml) to 123 baht

6% – From 40.20 baht a bottle (620ml) to 132 baht

7% – From 46.50 baht a bottle (620ml) to 178 baht

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Re: The logic of the asylum!

Post by skinner » March 5, 2017, 1:26 pm

Asiaphile wrote:
skinner wrote:I can not see this happenig at THESE rates. Tourism is a big revenue earner, and if Thailand becomes known as an expensive place to drink , backpackers will spend less time here ( and less money) *** tourists likewise. Two huge markets affected.
I too agree that the whole idea is silly but, as noted above, TIT so don't hold your breath.

However, I don't agree with your arguments. The impact by backpackers will only be a drop in the ocean. The majority of tourists coming to Thailand is Asian. They generally like to gamble but drink moderately, hence Prayuth's wish to allow casinos in Thailand.

The number of western tourist combined (Europe, America, Australia) was only about 15% last year, and how many of these were backpackers?
Besides, Thailand has repeatedly indicated that they want to move away from being a cheap holiday destination and aims at attracting more big spenders, so the loss of backpackers will only be seen as a bonus.
I have been living here for 15 years now, and have repeatedly heard how Thailand wants to move away from backpacker tourism and become a HIGH END destination. It will not happen. I would suggest that this is not in control of the government , but in the hands of the young people who choose to travel here. ( they have the disposable income)Expensive alcohol will not deter them , but will cut short their time in many tourist destinations here in favour of tourist destinations in neighbouring countries. S"x tourists likewise I would imagine.
Surely a bottle of beer could not cost 100 baht plus in the supermarket ? how much would it cost in a tourist establishment !!

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Re: The logic of the asylum!

Post by jai yen yen » March 5, 2017, 2:43 pm

Thailands appeal to many has been that it was exotic and affordable, with those things in mind people would put up open sewers, rip offs, danger, and a lot of other negatives. If Thailand becomes too expensive it will have to compete with a lot of other destinations that have a lot more to offer.

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Re: The logic of the asylum!

Post by FrazeeDK » March 5, 2017, 4:44 pm

seriously?? its all about us, the foreigners. Nah, as a piece of the alcohol industry in Thailand I'd bet tourists are low single digit participants... Its the Thai population that consumes most of the alcohol so its the average Thai that will suck up that extra tax.. It must have the Department of Social Morals dancing about in their stiff silk dresses..
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Re: The logic of the asylum!

Post by papafarang » March 5, 2017, 5:44 pm

true, if you counted every beer sold in every farang bar in udon for a week and totaled the whole lot, it would only be a fraction of the amount of beer bought by Thai's in UD town just on a Saturday night alone. you can go out to the ring road to some of those big thai restaurants with hundreds of Thai's drinking, hundreds of farang out drinking in udon would be a miracle
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Re: The logic of the asylum!

Post by FrazeeDK » March 5, 2017, 5:52 pm

nightime?? I thought the shorts/singlet and flip flop gangs sat at little Mom and Pop's stores along the main roads at 9AM drinking Archa Beers!! :badteeth:
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Owld Feller
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Re: The logic of the asylum!

Post by Owld Feller » March 5, 2017, 6:17 pm

Despite tax increases of up to 150%, Khaosod has reported that the Excise Department, responding to negativity online regarding the tax hikes, say that they don’t expect all brands to be subjected to the full tax increase. They claim each type of alcohol will be evaluated individually before being subject to tax changes. They also claimed that the price of wine will actually fall – despite it being taxed more.

That part of the statement (apart from the general illogical stupidity of it) was the part that caught my attention!

I can only hope that the Military Government (which claims to have an anti corruption policy) oversees their decision making to the N'th!

I''ll say no more on that subject, for obvious reasons!

For what it's worth, I believe that registering every establishment that employs 'bar girls', along with each girl's ID (and enforcing it), then adding a tax to their activities would address the Excise Department's deficit, without affecting the tourist (or domestic) trade.

EG:

A flat tax of (say) 1,000 THB per establishment then PLUS

100THB for short time.
200 THB for long time.

With other taxes based upon activity (maybe 50 THB for a b/j).

IMHO that wouldn't even register on most people BUT would address the problem they're now faced with!

It would also allow for more Income Tax to be raised BUT couldn't see it being popular with local Police, as their 'tea money' was reduced.

Just a thought!

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Re: The logic of the asylum!

Post by skinner » March 5, 2017, 8:04 pm

FrazeeDK wrote:seriously?? its all about us, the foreigners. Nah, as a piece of the alcohol industry in Thailand I'd bet tourists are low single digit participants... Its the Thai population that consumes most of the alcohol so its the average Thai that will suck up that extra tax.. It must have the Department of Social Morals dancing about in their stiff silk dresses..
Of course its not all about us, and definitely not about farang living here . But, I do think they care about tourism and their image, we all know they care about how they are seen, even if they are way off the mark. If Thailand becomes known as an expensive place it will damage tourism

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Re: The logic of the asylum!

Post by BobHelm » March 6, 2017, 7:07 am

Apparently everyone has worried needlessly.. :D
CONSUMERS are needlessly worried that a new excise bill will drive the prices of alcoholic beverages into the stratosphere, the Excise Department says.

The bill, soon to be published in the Royal Gazette, has caught public attention after many people came to believe, wrongly, that the new tax rates will double the retail prices of beer, wine and liquor.

People were confused about tax ceilings stipulated in the new excise law, said Somchai Poolsavasdi, director-general of the Excise Depart-ment. The tax ceiling on beer, wine and liquor will be 30 per cent of retail prices, or Bt3,000 per litre of alcohol. The new tax ceiling on cigarettes is much higher, at 90 per cent of the retail price.

“The ceiling rates are set for the next 20 years. But the applied rate will be much lower initially as we do not want to increase the tax burden,” Somchai said.

Prapas Kong-Ied, deputy permanent secretary of the Finance Ministry, echoed Somchai’s remarks, saying that making tax rates too high would encourage smuggling, and then the cost of law enforcement would rise.

“It is not worth the effort,” he said, trying to allay fears of a sharp rise in the prices of alcoholic beverages.

Nipon Poapongsakorn, an economist at the Thailand Development Research Institute, said he agreed with the new law that will change the way tax rates are calculated.

The new method will use retail prices as a base for tax calculation instead of using producer prices, as is done currently. The new tax will create a level playing field for producers, since the current structure allows some producers to take advantage of others. Retail prices will be decided by market forces, and tax authorities will have to enforce the law accordingly.

Nipon said the current excise law had a big loophole as it allowed tax officials too much discretion, which often ended up in discrimination.

Using retail prices to calculate excise tax rates will automatically lead to higher prices of alcoholic beverages, since retail prices are higher than producer prices. It will also lead to higher levies of value-added tax on beverage purchases, and in the end the cost of drinking will increase.

“I agree that prices of alcoholic beverages should be higher than they are currently, as some types of beer are very cheap,” Nipon said. After the price increase, alcohol consumption will drop slightly for a while, but consumption will return to normal later, he said.

Sakon Waranyuwattana, dean of Thammasat University’s faculty of economics, was cautious about the new excise-tax structure.

“Yes, I agree in principle, but I worry that implementation will be very difficult,” he said.

He warned that producers and retailers could collude to avoid full tax payment. The new tax may also cost some local governments revenue, as consumers may choose to buy in other areas where prices are lower. One of the reasons for raising taxes on alcohol is to discourage consumption so as to reduce the harm to people’s health. But the Finance Ministry also wants to collect more tax to offset the drop in revenue from import tariffs resulting from free-trade deals.
http://www.nationmultimedia.com/news/bu ... m/30308016

So there we are.
The new law will/will not increase the cost of alcohol by some amount that is unknown by those who have written it.
Clear as day.. :D

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