The Ministry of Finance is evaluating the potential implementation of taxes on products high in salt and fat as a health precaution. According to Deputy Finance Minister Paopoom Rojanasakul, these taxes would focus on specific items based on their salt and fat content, with the goal of reducing sodium and fat intake among the Thai population by 30%.
A local advocacy group, Less Salt, has reported that the average Thai consumes 3,636 milligrams of sodium daily, significantly exceeding the World Health Organization’s recommended limit of 2,000 mg. Excessive sodium consumption is linked to an increased risk of high blood pressure, kidney failure, heart disease, and stroke.
Following a meeting with officials from the Excise Department, Mr. Paopoom emphasized the need to balance revenue generation with economic growth and restructuring while also addressing environmental issues, public health, and good governance. He outlined five key sectors where excise taxes can have a significant impact: automobiles, oil, public health, batteries, and tobacco.
Regarding automobiles, Mr. Paopoom stated that tax policies should encourage investment in the automotive sector, particularly in manufacturing vehicles and components. This includes developing a supply chain that connects small and large industries, as well as creating employment opportunities. Tax incentives should promote increased domestic production of plug-in hybrid electric vehicles, battery electric vehicles, and fuel cell electric vehicles, while also supporting the ongoing production of internal combustion and hybrid vehicles. A clear timeline should be established for accepting short-term revenue losses to facilitate long-term industrial restructuring.
For oil products, the department is advised to introduce a carbon pricing mechanism within the excise tax structure, which encompasses six types of oil. This is intended to encourage behavioral changes in production and consumption that reduce carbon dioxide emissions without adversely affecting energy prices.
On the public health front, Mr. Paopoom encouraged the use of tax mechanisms to support preventive healthcare initiatives and reduce the consumption of unhealthy food products. This aims to improve public health and lessen the financial burden on the healthcare system. The mixed-sweet tax collection will proceed into Phase 4 as planned, and the department is investigating the potential implementation of a sodium tax on certain products and a fat tax. A transition period will be provided for affected businesses to adapt before any new legislation takes effect.
Concerning batteries, the department has been asked to explore the possibility of changing the current fixed tax rate of 8% on batteries to a tiered system that accounts for lifecycle factors, specific energy costs by weight, and battery types, in order to promote the clean battery and electric vehicle industries.
Mr. Paopoom also requested a review of the single-rate tobacco tax to minimize price distortions, considering the competitiveness of businesses and support for domestic tobacco farmers. Additionally, a monitoring system for cigarettes will be implemented using QR codes to combat illegal sales and enable public participation in verifying tax compliance and ensuring products meet standards set by the Excise Department.
