Government to slash rice export tax

The cabinet on Tuesday approved in principle the Commerce Ministry’s plan to reduce surcharges for Thai rice exporters on rice shipments under the EU and UK quotas.

Rachada Dhnadirek, a deputy government spokeswoman, said the export surcharge has been reduced to 1,500 baht per tonne for grains bound for the EU and 1,200 baht a tonne for shipments to the UK.

For 2021, the EU has granted Thailand a quota of 17,728 tonnes of white rice and 48,729 tonnes of broken rice while the UK has offered a quota of 3,727 tonnes of white rice and 3,721 tonnes of broken rice tariff-free. However, rice exporters had to pay a surcharge of 2,500 baht per tonne to the Commerce Ministry.

Moreover, exporters who buy rice from millers for export must pay a tax of 0.75% of export value.

The ministry reported that the surcharge cut is meant to increase the competitiveness of Thai rice exporters in the two markets.

The Foreign Trade Department introduced the surcharge for rice exporters under a quota agreement with the EU in 1997 to raise proceeds for the International Trade Promotion Fund.

Thai rice exports face fierce competition from countries such as Vietnam, which can produce high-quality and better varieties of rice to meet the demands of trade partners.

Ms Rachada said reducing the surcharge means that the International Trade Promotion Fund will have to forego about 31 million baht a year.

Prime Minister Prayut Chan-o-cha said the government will try its best to seek additional export markets in order to generate more income from the export sector to help boost the Thai economy this year.

He also reiterated the government will seek cooperation both via bilateral and multilateral agreements to boost the country’s international trade.