Alcohol taxation policy in Thailand: implications for other low- to middle-income countries

Authors

  • Bundit Sornpaisarn,

    1. Centre for Addiction and Mental Health (CAMH), Toronto, Canada
    2. Dalla Lana School of Public Health (DLSPH), University of Toronto, Canada
    3. Center for Alcohol Studies, Bangkok, Thailand
    4. Department of Mental Health, Ministry of Public Health, Nonthaburee, Thailand
    Search for more papers by this author
  • Kevin D. Shield,

    1. Centre for Addiction and Mental Health (CAMH), Toronto, Canada
    2. Institute of Medical Science, University of Toronto, Toronto, Canada
    Search for more papers by this author
  • Jürgen Rehm

    Corresponding author
    1. Centre for Addiction and Mental Health (CAMH), Toronto, Canada
    2. Dalla Lana School of Public Health (DLSPH), University of Toronto, Canada
    3. Institute of Medical Science, University of Toronto, Toronto, Canada
    4. Department of Psychiatry, University of Toronto, Toronto, Canada
    5. Institute for Clinical Psychology and Psychotherapy, TU Dresden, Germany
    • Jürgen Rehm, CAMH 33 Russell Street, Toronto, Ontario, Canada M5S 2S1. E-mail: jtrehm@aol.com

    Search for more papers by this author

ABSTRACT

Aim  Prevention of drinking initiation is a significant challenge in low- and middle-income countries that have a high prevalence of abstainers, including life-time abstainers. This paper aims to encourage a debate on an alternative alcohol taxation approach used currently in Thailand, which aims specifically to prevent drinking initiation in addition to reduce alcohol-attributable harms.

Methods  Theoretical evaluation, simulation and empirical analysis.

Result  The taxation method of Thailand, ‘Two-Chosen-One’ (2C1) combines specific taxation (as a function of the alcohol content) and ad valorem taxation (as a function of the price), resulting in an effective tax rate that puts a higher tax both on beverages which are preferred by heavy drinkers and on beverages which are preferred by potential alcohol consumption neophytes, compared to either taxation system alone. As a result of these unique properties of the 2C1 taxation system, our simulations indicate that 2C1 taxation leads to a lower overall consumption than ad valorem or specific taxation alone. In addition, it puts a relatively high tax on beverages attractive to young people, the majority of whom are currently abstaining. Currently, the abstention rates in Thailand are higher than expected based on its economic wealth, which could be taken as an indication that the taxation strategy is successful.

Conclusion  ‘Two-chosen-one’ (2C1) taxation has the potential to simultaneously reduce alcohol consumption and prevent drinking initiation among youth; however, additional empirical evidence is needed to assess its effectiveness in terms of the public health impact in low- and middle-income countries.

Ancillary