Thailand's tobacco: THB 60bn excise taxes (2022), aids 50,000 households
A recent report from the Oxford Business Group underscores the pivotal role of Thailand's tobacco industry in both the nation's economy and the sustenance of rural employment.
Ranked as ASEAN's second-largest tobacco leaf producer and the 16th largest globally, Thailand achieved significant milestones in 2021, exporting THB 7.4bn worth of tobacco and manufactured tobacco substitutes. Notably, the Thai tobacco industry further solidified its economic impact by contributing nearly THB 60bn through excise taxes in 2022, constituting 12% of the country's total excise revenue.
Contrary to misconceptions, the Oxford Business Group's economic impact report dispels myths surrounding the tobacco industry, revealing its dual role as a substantial tax revenue source and a significant contributor to health promotion. Specifically, THB 4.1bn from annual tobacco-related tax collections is directed towards the Thai Health Promotion Foundation.
Amid the pandemic, Thailand's agricultural sector emerged as a crucial source of income and employment, playing a pivotal role in the country's economic recovery. Consistently contributing 8.5% to the GDP in 2021 and 2016, the sector remains a vital employment provider, accounting for over 30% of the national workforce from 2016-2021.
Marc-André de Blois, Director of PR at Oxford Business Group, highlighted, "Our research reveals that Thailand's tobacco sector, beyond its economic significance, serves as a vital employer, particularly in rural communities in the north and northeast. Supporting nearly 50,000 households directly or indirectly, the industry proves resilient to natural challenges such as floods, droughts, and poor soil conditions."
While acknowledging its economic contributions, the Thai tobacco industry faces challenges, notably the proliferation of illicit products sold at lower prices. A survey by the Thai Tobacco Trade Association indicated a 97% growth in illicit trade through online channels from July to September 2022. Additionally, data from Thailand's Excise Department in mid-2021 revealed that 30% of the tobacco market in Thailand comprises illicit cigarettes.
Urging the inclusion of the tobacco industry in Thailand's national agenda, the report emphasizes the need to address issues related to the illegal trade of tobacco products and advocates for a more transparent excise tax regime. Proactive measures are deemed essential to safeguard Thai jobs, enhance excise revenue, and solidify Thailand's position as ASEAN's second-largest tobacco leaf producer.
