Illegal trade doubled

The consumption of illicit cigarettes in Thailand more than doubled between the fourth quarter of 2016 and the fourth quarter of 2017, according to a story in The Nation citing the results of a study conducted on behalf of Philip Morris (Thailand).
The increase was said to have implied an annual cost to the country of at least Bt3.6 billion in ‘lost’ tax revenue.
The study, conducted by Nielsen, showed that non-domestic cigarettes, or cigarettes without a Thai tax stamp, captured 6.6 percent of the market in Q4 2017, up from 2.9 percent in Q4 2016.
The study of 10,000 discarded cigarette packs found the problem was most widespread in the south of the country, with the provincial incidence at 76.6 percent in Satun, 67 percent in Songkhla, and 40 percent in Patthalung, said Pongsathorn Ansusinha, PMT’s director of corporate affairs.
Two cigarette brands made up about half of the non-domestic packs, neither of which was registered with the Excise Department.
Pongsathorn said that after the excise tax reform in September 2017, PMT had expected a significant reduction in licit cigarette consumption because some smokers could no longer afford to buy licit cigarettes. They would either quit smoking or turn to the roll-your-own tobacco or illicit cigarettes.
“By using the 6.6 percent rate, we estimate the consumption of non-tax-paid cigarettes in Thailand could reach about 100 million packs,” he said. “This could mean a loss of excise revenue of at least Bt3.6 billion per year, assuming excise tax of Bt36 per pack in 2018.”
And Pongsathorn warned that the loss could rise to as much as Bt5 billion a year by 2020 because the excise burden was set to rise again in October 2019.