ASIA – Thailand is considering excise tax exemption for drinks with a higher fruit and vegetable content to encourage healthy dieting and consumption in the country.
The Thai Excise Department has also unveiled plans to raise the required content of fruits and vegetables in juices to a minimum of 20% as a way to increase the income of local farmers.
Motivated by the need to curb rising obesity cases, Thailand established a sugar-sweetened beverage tax on juices to discourage manufacturers from making sugar-loaded products.
Fruits and vegetable juices are also subject to an excise tax charged based on suggested retail price (SRP).
Currently, fruit and vegetable juices containing 10% or more of fruit and vegetable extracts are not liable to the SRP-based excise tax, and the proposed minimum content increase targets this as well.
According to the Bangkok Post, the increased threshold of fruits and vegetables in juices is likely to be implemented by October 1.
The government began raising taxes on soft drinks with high sugar content on Sept. 16, 2017 and the levy was set to rise in stages over the next six years.
Taxes on sugar-sweetened soft drinks were changed from a 20% excise tax on the wholesale price to a 14% excise tax on the recommended retail price, plus a sugar tax based on content.
Juices in Thailand are subject to this regardless of their fresh fruit/vegetable content.
Taxes on fruit and vegetable juice rose to between 0.06 baht and 0.54 baht (0.2 cent to 2 cents) per bottle, and on energy drinks with high sugar content to between 0.32 baht and 0.9 baht.
Tea and coffee which were previously exempted from the sugar tax were hit the hardest when the new measures were implemented.
With rising concerns around obesity especially in the American and Asian nations, such moves are meant to encourage beverage makers like Coca-Cola to commit to lower sugar content in their brands.
Thailand is phasing in its sugar tax over six years (since 2017), split into two phases.
After the fourth year (2021), drinks that still contain sugar beyond the World Health Organisation’s standard of 6g per 100ml will be doubled, and these will be increased further in the sixth year (2023).
The Thai Finance Ministry estimates the sugar tax will boost revenue by US$79.32 million (2.5 billion baht) annually.