On February 28, 2019, Mr. Patchara Anantasit, Director-General of the Excise Department, revealed that the department is preparing to propose a draft royal decree on the excise tax rates for cannabis to the Ministry of Finance. It is expected to be submitted within this government term to establish a legal framework for the future, should the use of cannabis for commercial purposes be permitted. This would allow the department to collect taxes immediately. The draft Narcotic Drugs Act (No. ...) B.E. ... has already been approved by the National Legislative Assembly (NLA), which allows for the use of cannabis in necessary cases for medical purposes, research, and development, and includes provisions for its use in related industries in the future.

          The department has already detailed the draft royal decree on the excise tax rates for cannabis, including all tax rates and comparative collection rates, but cannot disclose them yet. Cannabis is considered a controlled product, similar to tobacco leaves, which must be regulated at every stage. The tax rates will differ between cannabis and other tobacco products, as well as for its use in various industries such as tobacco, pharmaceuticals, and cosmetics, which will each have different tax collection rates.

          “The department has prepared all the tax rates, but it is too early to discuss collection rates at this stage because the law currently allows cannabis use only for medical and educational purposes, which are tax-exempt. However, if commercial use is permitted in the future, we will have a tax collection framework ready to implement immediately. Cannabis is a unique product, classified as a semi-narcotic, and we must align our tax collection with international standards,” Mr. Patchara stated.

          Mr. Patchara further mentioned that the department has studied tax rates from several countries where cannabis is legally used for commercial purposes, such as the United States, which imposes a cannabis tax on liquid, powder, and dry forms at a rate of 15% of the value and a quantity tax of $50 per ounce. Thailand will need to adjust these rates to be appropriate and not apply the same rates uniformly.

          Nonetheless, the Director-General of the Excise Department stated after a meeting of the committee considering assistance for tobacco leaf farmers that the meeting approved the expedited disbursement of 39 million baht in aid to tobacco leaf farmers affected in the first round, from a total assistance budget of 159 million baht. This will be given to 4,253 farmers who sell tobacco leaves directly to the Thailand Tobacco Monopoly (TTM), through the Bank for Agriculture and Agricultural Cooperatives (BAAC). The BAAC will verify the farmers' names, and if correct, payments can be made immediately. The remaining group of over 7,000 farmers selling tobacco leaves to TTM and more than 4,000 selling to private entities will need further verification of their information.

 

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