SEATCA TOBACCO TAX PROGRAM
introduction
While some countries have made significant progress over the past several years in formulating and implementing tobacco tax policies according to the WHO FCTC Article 6 Guidelines, the region as a whole is advancing very slowly. Most countries lack a long-term vision when it comes to the tobacco tax policy, and therefore do not evaluate nor update their policies regularly according to their social and public health targets. The obstacles to the compliance with the WHO FCTC Article 6 are complex tobacco tax structures, small or non-existent tax increases that fail to decrease the affordability of cigarettes, weak tax administration, and tobacco industry interference in both tobacco tax policy formulation and administration
Tobacco tax burden as percentage of cigarette retail price in ASEAN
Thailand currently has the highest tax burden as a percentage of retail price (78.6%), followed closely by Philippines (71.3%) and Singapore (67.5%)
* There are no licensed tobacco importers and retails in Brunei since May 2014. Hence, there are no cigarettes being sold legally in the country.
**The estimate was calculated based on premium cigarette brand.
Cigarette tax system in ASEAN region
Type of Tax Applied | ||||
|---|---|---|---|---|
countries | Excise Rate | VAT/GST | Import Tariffs | Others |
Specific Tax | ||||
Brunei Darussalam | BND 0.25/stick | N/A | N/A | N/A |
Indonesia | IDR 80-380/stick,
(multiple tiers | 8.40% | 0% from ASEAN
plus China
40% from outside
ASEAN plus China | Local cigarette tax
10% of excise
tariff |
Philippines | PHP 21 or 28 per pack
(2 tiers) | 12% | 3-10% | Single uniform rate by
2017, then annual 4%
increase starting in
2018 |
Singapore | SGD 0.388/stick | 7% | N/A | N/A |
Ad Valorem Tax | ||||
Cambodia | 15% of 90% of
invoice price | 10% | 7-35% plus
10% import VAT | Public lighting tax 3%
of invoice value, Profit
tax 20% of Profit,
Turnover tax 2% of
invoice value |
Myanmar | 120% of retail price
(Commercial tax) | none | 30% on CIF | 1% special excise
duty, profit tax,
income tax |
Vietnam | 65% of ex-factory price
(75% of ex-factory price
in January 2016) | 10% | 30-135% | N/A |
Mixed System | ||||
Lao PDR | 15-30% of production
cost, plus LAK 500
additional specific tax | 10% | Flat rate USD 0.40/pack | Royalty fee 5% of
production cost |
Malaysia | MYR 0.25/stick specific
tax and 20% ad valorem
tax | 5% | MYR 0.20/stick | N/A |
Thailand | 87% of ex-factory price
or THB 1/gram, whichever
value is higher | 7% | Exempted but
other local taxes
are applied | Local tax THB 0.093/-
stick, ThaiHealth tax
at 2% of excise, and
TV tax at 1.5% of excise |
Generally, cigarette prices remain affordable and relatively low throughout the region, but particularly in Cambodia, Lao PDR, and Vietnam (less than USD 1 per pack) where regular tax increases are needed to keep pace with economic and income growth.
Cigarette affordability: Relative Income Prices (RIP)*
of cigarettes in ASEAN
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Apartment 4D Thakolsuk Place 115 Thoddamri Road, Dusit, Bangkok Thailand 10300
Email: info@seatca.org