Alfie · 2 · 124

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Offline Alfie

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Is this good news or bad news for Thai farmers growing sugar?

Thailand to stop sugar subsidy by year-end

21 Feb 2017
The government will stop subsidising sugar production and drop domestic control of consumer prices for sugar by the end of the year, a Ministry of Agriculture official said on Tuesday.

Brazil challenged Thailand at the World Trade Organization (WTO) in March last year, arguing that Thailand's subsidies for sugar producers have dragged down global prices.

"Our new policy will be to let the price of sugar match that of the global markets whereas before it was under the control of the Ministry of Agriculture," Buntin Kotesiri, administrative director at the Sugar and Cane Producing Board, told Reuters.

"We expect these changes to come into effect at the end of the year during harvesting season."

Mr Butin said the move was in response to Brazil's challenge.

Thailand is the world's second largest sugar producer after Brazil. Brazil said in November that it had seen the proposal for changes in Thai policies and said that it was an acceptable solution.

There are none so blind as those who will not see.

Offline Alfie

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And for consumers, the new sugar tax law looks like bad news.


Department to clarify the public before new sugar tax law is enforced
February 18, 2017
The Excise Department is prepared to explain to manufacturers as well as the general public on the new sugar tax law that will cap tax on sweetened beverage at 20%.

The sugar tax law, which is pending publication in the Royal Gazette after winning National Legislative Assembly approval, will come into effect 180 days after publication.

Somchai Poolsavasdi, the director-general of the Excise Department, said the new law will increase excise tax for beverages with high sugar content.

The department plans to clarify to the public that soft-drink with high sugar content will be subjected to higher taxes so that consumers and ma manufacturers understand the necessity of the increase.

He said public seminars will be organized and both consumers and factories will be invited to join so that all the details of the new requirement can be explained to them.

He said adjustments will have to be made by manufacturers as the new law applies to all drinks with high sugar content whether from natural sugar from sweet fruits, processed sugar or artificial sweeteners.

As such, drinks with sugar content exceeding the prescribed amount will be slapped with higher taxes, he said.

With regard to complaints by some manufacturers that a modification of their drink formulas may result in loss of their client base, he stated that they have no choice but to pay higher taxes as the priority for the government is to ensure the general health of the public.

Yesterday the Excise Department revealed that total excise tax collection for the first four months of last year amounted to 130 billion haht, representing a two billion baht shortfall.

But it however said that the situation seems to be improving with many contributing factors such as the marked increase in consumer spending power, the taxation increase for engine oils and aircraft fuels.

These will allow more tax income to be generated, and as such the department has adjusted its tax collection target for the 2018 budget year to be 600 billion baht.
There are none so blind as those who will not see.