As part of the plan to spur tourism in Thailand, the Thai cabinet had, on 2 Jan 24, approved tax cuts on alcoholic beverages. The tax measures are expected to take effect shortly, once the ministerial regulation is published, and will expire at the end of this year.
Alcohol tax cuts approved to spur tourism
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reducing excise taxes on wine from 10% to 5%, and
eliminating taxes on local spirits (10% previously).
Excise tax on entertainment venues will also be halved from 10% to 5%.
According to Lavaron Sangsnit, permanent secretary of the Ministry of Finance, the lower tax revenue from excise tax cuts would be offset by higher tourist spending.
The tax cuts follow Thailand’s decision to extend operating hours for entertainment venues to 4 am in Bangkok and other key tourist destinations since Nov 2023.
New measures a positive for Thai Bev
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We expect Thai Beverage (SGX:Y92) to only partially pass on the lowered excise taxes (in the form of lower retail pricing) to consumers, given:
the time-limited nature of the measures, and
likely higher input costs for spirits in FY24F.
Reiterate ADD
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Above is the excerpt from research report by CGS-CIMB. Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
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