Baht appreciation and tax burden drive price hikes

2026-03-23 - 08:41

Rising costs driven by currency fluctuations, taxes, and global shipping disruptions are putting pressure on importers and retailers, with businesses passing the increased expenses on to consumers. A retailer, Tandin, said, “Usually, we get one month credit from the importers, and then we pay our dues to them. But recently, we have had to pay cash down to them because even they are struggling with paying taxes and said that they need the money as cash so they can pay their taxes since they do not have money to even pay taxes. We are at such a disadvantage these days, and the government said that the price will go down after one or two months after the introduction of the GST regime, but it is almost the end of the third month of this year and we are still having to pay more money, which in turn increases the price for the customers. We have lost so many customers because of the price increase and even though we take the same amount of profit as before or even less, they say it is too expensive.” Sonam, a retailer, said that customers have complained about higher prices and that some have shifted to shops that do not fall under the GST regime, where goods are sold at lower prices. Importers say rising costs are being driven by both currency appreciation and tax requirements. An importer, Phuntsho, said, “Ever since the Thai Baht price has increased, we have had to increase our prices to adjust to it. Even though GST has cut off the sales tax, we have to pay an excise tax permit and excise tax separately which doubles our taxes for one product. Since we have to keep running this business according to market demand, we have to import as well. And just last month, we paid over Nu 250,000 just for the excise tax permit and not the excise tax itself. Owing to the increase in the Baht value and the extra taxes we pay, we have had to increase the price of items like ice tea and Red Bull. A case of ice tea which was Nu 1,150 is now Nu 1,650, and a case of Red Bull which was Nu 2,500 before has now become Nu 3,150.” Another importer said, “Due to the recent surge in the value of Baht, we have had to pay more than what we used to pay to the exporters from Thailand. For two containers, we used to pay around Nu 483,000 but this month, we had to pay Nu 535,000 without including taxes that are charged at the point of entry. In addition, the shipping price of the containers have also increased due to the ongoing war according to our trader.” This reflects about a 10 percent increase in costs for importers, which is then passed on to wholesalers and retailers, and ultimately to end consumers. According to the Bhutan Trade Statistics, Thailand is the sixth largest source of imports for Bhutan, with goods worth about Nu 2.86 billion imported from the country. The Baht gained nearly 9 percent against the dollar over the course of 2025, continuing a steady years long appreciation. According to the United Nations Trade and Development, shipping prices increase during war because vessels are forced onto longer, costlier routes to avoid conflict zones, significantly raising fuel and time expenses. War creates acute shortages of available ships as companies suspend operations or face blockades, while simultaneously driving up insurance premiums and security costs. According to The Nation Thailand, Thailand faces potential export losses of about 60 billion Baht if sea and air transport are disrupted for two months. Thailand’s shipping routes and maritime trade are significantly affected by the ongoing conflict between Iran and the United States. The effective closure of the Strait of Hormuz by Iran has forced vessels onto alternative routes, increased shipping risks, and disrupted supply chains. Thai flagged commercial vessels have been targeted in these waters, leading to cargo delays and concerns over energy costs.