Thailand to abolish hefty import tariff on wine

Purchasing wines in Thailand is about to become more affordable, as the country plans to implement a comprehensive tax reform that includes the complete removal of import tariffs in a bid to boost tourism.

In a groundbreaking decision, the country's cabinet has approved tax reductions for alcoholic beverages, such as wine, local liquor, and spirits, as part of an initiative to promote tourism, a significant contributor to the Thai economy, as announced by the government earlier this month.

According to a government spokesperson, import tariffs on wines, currently set at 54% and 60% of the declared value, will be eliminated indefinitely. Additionally, the excise tax on wine will be reduced from 10% to 5% of its price.

These tax cuts are expected to substantially lower the cost of imported wines in Thailand. Traditionally, the country has imposed an average tax of approximately 250% on wine, including import tariffs, excise tax, municipal tax, and a 7% VAT.

This move follows a series of relaxations on alcohol sales introduced by the government. In 2022, it lifted a five-decade-long ban on alcoholic beverage sales in the afternoon between 2 and 5 pm and extended operating hours for entertainment venues, including nightclubs and bars, to stimulate consumption.

The new tax measures will come into effect shortly and will remain in place until the end of the year, according to the Thai government.

In the previous year, the kingdom welcomed 28 million international tourists, contributing 1.2 trillion baht (US$34.5 billion) to the Thai economy, with the top five countries being Malaysia, China, South Korea, India, and Russia.

In addition to wine, spirits and local liquors will also benefit from the tax cuts. The excise tax for these two categories will be reduced from 10% to zero to further encourage consumption.

It's worth noting that in Thailand, in addition to a price-pegged excise tax, taxes are also applied based on volume and alcohol content. This means that all wines, regardless of price, are assessed at a tax rate of 1,000 baht per liter for 100 degrees of alcohol content. For example, a 0.75-liter bottle of 13.5% alcohol wine incurs a tax of [(0.75 × 13.5 × 1,000)/100], totaling 101 baht. Additionally, wine is still subject to a 7% VAT tax, municipal tax, and health tax.