Thailand’s SSB Tax and

Implementation Challenges

The views expressed in this presentation are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank Institute (ADBI), the
Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and
accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.

Obesity and Fiscal Policy Training Workshop: Tax Policy Design and Health Impact in Asia
July 13, 2018 Asian Development Bank, Manila, Philippines
 Outline
1. An Overview of Thai Society
2. Increasing trend of NCDs and negative effects
3. Sugar Consumption
4. Consumption Behavior
5. Principle of the Excise Tax
6. Excise Tax Collection Revenues
7. Taxation on Non-Alcohol Beverages
8. Taxation of powdered & concentrated beverages
 Overweight prevalence of Diabetes prevalence of Hypertension prevalence of
Thai people age>15 Thai people age>15 Thai people age>15
40 10
8.9 30 24.7
37.5 6.9 21.4
38 8 25
% Prevalence

% Prevalence

% Prevalence
36
34.7 20
6
34 4 15
32 10
2
5
30 0
0
2009 2014 2009 2014
2009 2014

Source : the 4th, 5th Health Survey Report in Thai Population

Source : “Fiscal Tool for NCDs Control” Dr.Pitada Presertsom, BODH, DOH, Thailand
 Death rate of NCDs in Thailand 2007 - 2014

100.00

90.00
84.38
90.34
90.34 CVD
80.00
Death rate per 100,000 people

70.00 61.94 72.12

61.94
60.00 55.20 56.00

50.00

40.00
31.69
36.13 38.66 Stroke
IHD
27.53 30.04
30.00 27.83
20.65 20.78 21.04 26.91
20.00
20.25 21.19 20.68 20.47 22.47 23.45
14.93
17.53 DM
HT
10.00 12.21 12.22 11.06 10.76 11.88 12.06
7.99 10.95
3.90 3.62 3.89 5.71 5.73
0.00 3.64
2007 2008 2009 2010 2011 2012 2013 2014
CVD IHD Stroke HT DM

Source : Strategy and Planning Division, Ministry of Public Health

 Evidence : showed increasing trend of NCDs and negative effects

Reduce quality of life and

productivity
Health care cost of obesity,
Increasing trend of diabetes, cancer and
Non-Communicable heart disease
Diseases (NCDs) = 2.14 % of GDP (2009)
Increase Health
Expenditure
Source : “Fiscal Tool for NCDs Control” Dr.Pitada Presertsom, BODH, DOH, Thailand
 Sugar Consumption
Sugar consumption in Thai people (2002-2014)

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Source: Dek Thai Mai Kin Wan Network

Source : “Fiscal Tool for NCDs Control” Dr.Pitada Presertsom, BODH, DOH, Thailand
Trend of Sugar Consumption per capita in ASEAN 1999-2022
 Consumption Behavior
Beverages consumption among Thai
Dietary behavior among Children and adolescents People age > 6 yrs.
By Type of Beverages in Bangkok
Ate from fast food restaurant
>2 days per week

Drank carbonated drinks

>1 times per day

Regularly eat vegetable during

past 30 days

Regularly eat fruit during past

30 days

Source : Global School-based Student Health Source : National Food Consumption Survey 2015,
Survey 2008, 2015 Mahidol University

Source : “Fiscal Tool for NCDs Control” Dr.Pitada Presertsom, BODH, DOH, Thailand
 Principle of the Excise Tax

Tax Base Tax Rate

Goods - Suggested Retail Price Ad Valorem - based on value of product
Services - Total Income Specific - based on product amount

Tax Point
Domestic Goods
- when goods are taken out of factory, a bonded warehouse under the
law on customs, a duty-free zone or a free zone
Imported Goods
- accrue at the same time as payment of duties on imported goods

9
Thai Excise Department
 Principle of the Excise Tax
Sin and Health
• Limit consumption of goods or services which have health impacts
• alcoholic beverages / tobacco products / playing cards / horse racing
course / non-alcoholic beverages

Luxury
• Limit consumption of luxury goods or services
• non-alcoholic beverages / golf course / massage parlor / perfume /
nightclub and discotheque

Environment and Energy

• Limit environmental impacts resulted from certain goods and services,
while promoting specific goods with energy usage efficiency
• petroleum products / automobiles / motorcycles / batteries
10
Thai Excise Department
 Excise Tax Collection Revenue Fiscal Year 2017

Items Million THB Million USD

1) Petroleum Products 216,885 6,507
2) Automobiles 102,150 3,065
3) Beer 87,196 2,616
4) Liquor 62,658 1,880
5) Tobacco Products 68,603 2,058
6) Non-Alcoholic Beverages 16,858 506
7) Others 8,011 240
Total 562,361 16,871

Thai Excise Department

 Taxation on Non-Alcoholic Beverages

Non-tax Policy Tax Policy

Specific Tax
Specific Tax: Health Concern
Ad Valorem: Luxury purpose VS.
Raise awareness about sugar consumption
Ad Valorem Tax

Change consumption habits (5-6 years) Use tax differentiate to Tax

change consumption habits Differentiate
Create cooperation between public and
private sectors to suggest suitable sugar intake Consider effects on tax
(Thai Pledge) policy that can lead to Substitution
consumption of substitute Effect
Provide a variety of healthy beverages products

12
Thai Excise Department
 Taxation of Non-Alcoholic Beverages

Previous Current
Specific tax based
Tax on sugar content
Ad Ad
Based over 6 grams per
valorem valorem
100 ml

Ready Ready Powered and

Products concentrated
to drink to drink
beverages

13
Thai Excise Department
 Taxation on Non-Alcoholic Beverages
Tax Structure According to Excise Act B.E. 2560

Unit Tax Based on Sugar Contained

Ad valorem
Item 16 Sept 2017
(Suggested 1 Oct 2019 to 1 Oct.2021 to 1 Oct 2023
Retail Price) Sugar Content to
30 Sept 2021 30 Sept 2023 onwards
30 Sept 2019
% gram/100 ml Baht/Litre Baht/Litre Baht/Litre Baht/Litre

Soda 14 - - - - -

Carbonated Soft Not Over 6 0 0 0 0

Drinks Sport 14
Drinks Energy
Drinks More than 6
RTD Less than 8
0.10 0.10 0.30 1

Juice: General 10
More than 8 0.30 0.30 1 3
Less than 10
Juice: Exempted Exempted
More than 10 1 3 5
Less than 14 0.50

Powdered
Beverage & More than 14
0 1 3 5 5
Less than 18
Concentrated
Beverage Over 18 1 5 5 5

Thai Excise Department

14
 Taxation on Non-Alcoholic Beverages
Period Transition Period 01/10/19 - 30/09/21 01/10/21 - 30/09/23 01/10/23
16/09/17 - 30/09/19 onwards
Sugar
Content Ad Unit Tax Ad Unit Tax Ad Unit Tax Ad Unit Tax
g/100ml. Valore Based Valorem Based Valorem Based Valorem Based
m
Not Over 6 0 0 0 0
More than 6 0.1 0.1 0.30 1
Less than 8
More than 8 0.3 0.3 1 3
Less than 10
More than 10 0.5 1 3
Less than 14
More than 14 3
5
Less than 18
1 5
Over 18 5 15
 Taxation of Powdered Beverages
& Concentrated Beverages

Part 16 Other Products

Under the Excise Act,
B.E. 2560 (2017)
“Powdered beverages and
concentrated beverages that
contain sugar and can dissolve
in water, excluding milk and
supplementary foods”

15
Thai Excise Department
 Q&A
Thank You