Here’s why some Bangkok bars are now making you pay “E-tax”
It’s a real thing. But it’s not normally the customer who pays it.
5 years ago
When Ploy and her friends asked for the bill after a few drinks at the new Lennon’s bar at Rosewood Bangkok, they hadn't anticipated what was to come. Hidden beneath the standard 10-percent service and seven-percent VAT was another tax. Labeled "E-tax," it added a further 10-percent onto their bill, meaning that a base price of B11,880 became B15,711—an uptick of almost one third. It was also the first time this group of Bangkok locals had ever heard of an “E-tax.”
“Usually, there is just VAT and service charge, so I didn’t pay too much attention to what was written on the menu,” said Ploy (not her real name). “When the bill came, one of my friends pointed it out. We called the staff over, who informed us it was an ‘entertainment tax.’ I was even more puzzled because I really had never seen this anywhere else before.”
What Ploy had discovered was the September 2017 update to Thailand’s Excise Tax (the “E” doesn’t stand for “entertainment,” though live music does have something to do with it). It states that “entertainment venues”—those with live music or music past midnight, according to the 2003 regulations—must pay an additional 10-percent tax to the Ministry of Interior. It’s the same law that affected all alcohol and tobacco prices around the same time.
Charging that tax as a percentage on top of the customer’s bill is not standard practice. However, a handful of Bangkok bars have started doing just that.
One is Spasso at Grand Hyatt Erawan Bangkok. Here, they add it as an unspecified percentage on bills incurred “after 10pm.” While the menu states that excise tax is added, it doesn’t put it as a percentage. Rather, it gets incorporated into the base prices after 10pm, meaning your drink might look more expensive than what’s written in the menu.
Another is The Bamboo Bar at Mandarin Oriental Bangkok, a cocktail lounge recently voted the no. 8 best bar in Asia. Here, they add excise tax at a standard rate of 11 percent at all hours. Between Sep 2018 and Feb 2019, the bar picked up two scathing Tripadvisor reviews as a consequence.
“BE AWARE !!! Apart from charging 10% Service Charge, and 7% VAT separately, they also charge random amount of Excise Tax (The Excise Tax value has no percentage relation to the bill value),” wrote one user.
The menus currently posted to The Bamboo Bar's website state excise tax at 11 percent alongside service and VAT. Nobody at the Mandarin Oriental was available to comment.
The menus currently posted to The Bamboo Bar's website state excise tax at 11 percent alongside service and VAT. Nobody at the Mandarin Oriental was available to comment.
Ploy also took her experience to social media, posting the bill to her night at Lennon’s on her anonymous Facebook profile @QuarterPast6, where it was quickly shared over 30 times.
Chris Potrananda, partner at Strathmore Litigation Law Firm and Asset Management and a politician for the Future Forward Party, shares their outrage. “Excise tax is for the owners and operator. This has nothing to do with the retail price,” he said. “It’s like corporate tax—you would never make your customer pay for the tax on your profit. The law says the owner needs to pay. Now the owner asks the customer to pay for it. To me it’s really weird.”
Usually, says Sanya Souvanna Phouma, founder of venues including Cactus, Sing Sing and Jacqueline, bars where the excise tax is applicable will take excise into account when setting their base prices. “We accounted for it as part of our yearly adjustment in 2018, but only by raising a little bit,” said Sanya. “If we were going to add a premium it would be to pay live bands, like they do in Japan.”
While no one at Rosewood would speak on the record about why the “E-tax” is currently stated as an add-on, a spokesperson has said they will consider absorbing it into base pricing in the future. “As a newly opened establishment, we are fully abiding by the government regulations,” the spokesperson said via email.
For Chris, charging excise tax on top of the consumer’s bill is part of a wider problem with the Bangkok F&B industry’s plus-plus culture. “Restaurant business owners in Thailand have put VAT on top of their retail price for decades, while other businesses don’t. 7-Eleven never puts seven percent on top of their goods. If we let bars do this as if it’s normal, we’re going to need to pay them the rest of our life.”
It’s easy to feel his outrage. Bars have to pay their taxes, and this is a real tax. But we as consumers don’t need to know how much of what we pay is going to the tax man. What we do need to know is the price of our drink. That, unfortunately, just got removed one degree further from reality.
Additional reporting by Oliver Irvine.
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