A recent visit to Thailand by UK Secretary of State for Trade and Industry, Patricia Hewitt, is hoped to have assisted the Scotch Whisky Association and other spirits lobby groups in their bid to force reform of the Thai excise system.
The chief aim is to bring to an end the system of “double taxation” of brands which are produced in Thailand from imported raw material. The companies pay excise on the spirits imported to form the base of the products and again on the completed product. Brands subject to this form of taxation include Johnnie Walker ONE, Bacardi Breezer and Takara Zest.
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Spirits producers are lobbying for the imposition of one single tax on these products. Moreover, they say that an effective reduction in taxes would boost jobs and exports and would also ultimately increase the total tax yield.
It is also being argued that a less discriminatory tax system could help Thailand to become the regional hub for international companies. The country is in the centre of the South East Asia region, with a solid market in its own right and good access to other countries in the region. Companies say that makes Thailand an attractive location for a regional centre but the taxation system would count against it. Furthermore, companies may consider locating their regional centres in other Asian countries which are subject to less punitive duty rates when exporting to Thailand.
