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Excise Tax Collection Set for 2023: Alcohol, Beer, E-Cigarettes, and EV Batteries to Face Higher Taxation

September, 28 2022

Excise Department's Strategic Plan for 2023

Mr. Ekniti Nitithanprapas, Director-General of the Excise Department, stated that under the 2023 strategic plan, the department will adopt the EASE Excise strategy to enhance flexibility and efficiency in tax collection. The department aims to become a leader in environmental and social taxation while promoting good governance to drive sustainable growth.

This strategy is based on four key pillars:

1. ESG/BCG Focus

   • Using tax policies to promote ESG (Environmental, Social, and Governance) and BCG (Bio-Circular-Green Economy) initiatives
   • Implementing tax measures to reduce social and health impacts, improving public well-being and national security

2. Agile Way of Working

   • Enhancing work efficiency through digital and data skills training
   • Implementing Agile work processes and Design Thinking to increase speed, flexibility, and innovation

3. Standardization

   • Transitioning to a digital organization through process automation
   • Improving service standards based on taxpayer experiences
   • Applying ESG governance frameworks in excise tax management

4. End-to-End Customer-Centric Service

   • Offering seamless, omnichannel tax services
   • Establishing paperless processes to promote environmentally friendly and sustainable operations

Key Tax Reforms for 2023

The Excise Department will implement six major tax reforms by the end of fiscal year 2023:

1. Encouraging the use of ethanol in bio-plastic production
2. Supporting bio-jet fuel development
3. Adjusting EV battery tax structures, with a focus on incentivizing recyclable batteries
4. Introducing a carbon credit tax rate
5. Imposing excise tax on e-cigarettes and intensifying crackdowns on illegal e-cigarette trade
6. Revising excise taxes on alcoholic beverages, including a new tax rate for 0% alcohol beer

Excise Tax on 0% Alcohol Beverages

Studies indicate a growing trend among young consumers preferring 0% alcohol beverages. The Excise Department will establish a specific tax rate for these drinks, distinct from standard non-alcoholic beverages and alcoholic drinks. When the new tax rate takes effect, alcoholic beverages exceeding the prescribed alcohol content will face increased excise taxes.

This measure aligns with public health policies aimed at reducing alcohol and e-cigarette consumption, controlling illegal e-cigarette trade, and supporting public health initiatives.

Projected Revenue Collection for 2023

• 2022 Revenue Target: 500 billion THB
• 2023 Revenue Target: 567 billion THB (+10% increase)

The increase in revenue is expected despite the reduced fuel tax rate that previously impacted revenue collections.