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Illegal cigarettes in Thailand: An economic loss of 30 billion baht!
In 2025, illegal cigarette consumption in Thailand will increase to 28.1%, causing massive economic damage.
Illegal cigarettes in Thailand: An economic loss of 30 billion baht!
There are worrying developments in cigarette consumption in Thailand. Loud Policy Watch The proportion of illegal cigarettes rose to 28.1% in 2025, a significant increase compared to 25.4% the year before. This illegal trade has a massive economic impact, amounting to over 30 billion baht annually. The country's tax budgets are particularly affected, with 18 billion baht alone being lost tax revenue.
The south of Thailand is particularly badly affected: in the provinces of Satun, Songkhla, Phatthalung, Phuket and Nakhon Si Thammarat, the proportion of illegal cigarettes is over 60%. In addition, other provinces such as Bangkok and the west coast show high values of over 40%. The sources of illicit cigarette consumption are alarming, with over 98% of products coming from tax evasion abroad, while 21% come directly from Cambodia.
Economic Impact and Tax Reform
The responsibility now lies with the Thai government, which is under pressure to reform the existing tax structure. This is viewed as inefficient and prevents the state from stabilizing its revenue through tobacco tax. The continuous decline in tobacco revenues since 2017 makes rapid adjustment necessary. It is currently proposed to change the complicated tax structure from two rates to a single rate in order to increase revenue and ensure financial stability.
Thailand's public debt is currently at 63.20% of GDP and will rise to over 69.32% by the end of 2025. This situation is exacerbated by an interest rate of 9.59% on government revenue. Tobacco tax reform could be implemented quickly without relying on extensive legislative processes.
Connection with the digital future
In conclusion, Thailand is facing a crucial period in which both the fight against the illegal cigarette trade and adaptation in various economic areas such as communications and technology are of great importance. The government's measures are therefore not only of economic interest, but also of social interest.