The cabinet has approved a new excise tax structure for cigarettes, which may increase the price of a pack of 20 by 6-8 baht, and the Excise Department will release more details this Thursday at 4pm, after the new rate is published in the Royal Gazette.

The new excise tax structure was proposed by the Finance Ministry.

Currently 20% tax is applied to cigarettes priced at 60 baht per pack of 20. However, the new rate will be 25%, but no more than 40%.

The Finance Ministry explained that the increase is to help tobacco farmers not to be affected by the tax rate increase, to prevent new smokers, reduce the illegal cigarette trade and to increase revenue collection.

It is currently unclear when the new tax rate will come into be effect.

Meanwhile, it has been reported that the new tax rate may affect the production of cigarettes, with the Tobacco Authority of Thailand expecting the production to reduce from 28 billion cigarettes per year to only 18 billion.