Thailand’s Finance Ministry Looks to Hike Cigarette Tax to Help Fund Universal Health Care

BANGKOK – Thailand’s Finance Ministry’s plan to seek the Cabinet’s approval on a new rise in excise taxes that will result in the retail prices of cigarette being raised by 2 baht per pack has drawn mixed reactions.

The ministry aims to gain about 3 billion baht more in additional tax revenues per year from the proposed hike in cigarette taxes for use to fund the country’s universal coverage (UC) health care scheme, better known as the 30 baht scheme.

And as soon as the media began reporting about the proposed cigarette tax hike earlier this week, some critics expressed concerns over a negative impact of the tax rise on the tobacco growers.

Dr Prakit Vathesatogkit, secretary general of Action on Smoking and Health Foundation, welcomed the ministry’s decision, saying the cigarette tax hike will lead to a significant decrease in numbers of smokers, especially among low-income earners.

In the economic aspect, the government may still have to weigh the pros and cons of the planned tax hike and explore other options; but in terms of public health protection, to raise the cigarette prices is an effective measure to curb the number of smokers, he said.

Every year, about 50,000 people died of diseases associated with smoking that is responsible for about 1 million patients suffering illnesses associated with smoking, he said citing statistics by the World Health Organization.

Before these people died, they on average became bed-ridden for three years, during which they became a burden to both their families and the country’s health care system, said Dr Prakit. Several other countries even state in their laws that the cigarette taxes be raised at least once a year, while some countries such as Australia raises cigarette taxes every six months, he said.

Thailand has implemented only 12 cigarette tax hikes since 1993, or every two years on average, he said.

Dr Pinij Hiranchot, a member of the National Legislative Assembly’s (NLA) committee on the national health security, however, questioned as to why the Finance Ministry singles out cigarette tax and why it doesn’t treat all types of sin taxes equally.

Still, he said, it is the government that always trims the amount of budget requested for the UC such as when a total of 3 billion baht was requested, only between 2.7 and 2.8 billion baht were approved.

If the ministry really intends to resolve the budget matter with this option, it should raise all types of sin taxes for the sake of fairness, he said.

Source: Thai PBS