Alcohol taxation policy in Thailand: implications for other low- to middle-income countries
Article first published online: 11 FEB 2012
© 2012 The Authors, Addiction © 2012 Society for the Study of Addiction
Volume 107, Issue 8, pages 1372–1384, August 2012
How to Cite
Sornpaisarn, B., Shield, K. D. and Rehm, J. (2012), Alcohol taxation policy in Thailand: implications for other low- to middle-income countries. Addiction, 107: 1372–1384. doi: 10.1111/j.1360-0443.2011.03681.x
- Issue published online: 10 JUL 2012
- Article first published online: 11 FEB 2012
- Submitted 27 February 2011; initial review completed 12 May 2011; final version accepted 3 October 2011
- drinking initiation;
- low and middle income countries;
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.