Manufacturers of sugar-laden beverages in Thailand have been given more time to adjust their recipes as the government has decided to postpone the hike in excise levy by another 6 months to 31 March 2023.
The amended excise tax structure on beverages came into force in 2017, adding a levy on sugar-based sweeteners on top of the excise duty charged to beverages. The added excise tax on sugar-based sweeteners gradually increases over 4 phases, which is intended to help entrepreneurs adjust to the higher tax burden.
Thailand has applied the new tax structure to sugary drinks, cigarettes, alcoholic beverages and imported wine since September 2017. The levy on sugary drinks is capped at 20%, with beverages containing more sugar carrying a larger tax burden than less sweetened beverages.
In May 2021 the government agreed to postpone the 3rd phase of the hike for one year, from October 2021 to October 2022, due to the pandemic.
The Excise Department classified sugar content in beverages into 6 levels based on a volume of 100ml starting with below 6g, 6-8g, 8-10g, 10-14g, 14-18g, and more than 18g.
The tax hike on sugary beverages is not only based on WHO recommendation but also in line with the Excise Department’s strategy to reduce the consumption of unhealthy food.
One manufacturer of fruit juice in Thailand, Doi Kham Food Products Co, said the extension will give the company more time to adjust its production process and drink formula while it also plans to expand into herbal drinks in the next few years.