The excise department extended an excise duty exemption for alcohol used for cleaning until mid-2021 in order to reduce the tax burden for producers.
The move, approved on December 23, extends the excise duty exemption for cleaning alcohol to June 2021. The exemption has been in place since March when the Covid-19 outbreak increased.
The aim is to reduce the excise tax burden borne by manufacturers and to help the public protect themselves against Covid-19 through the use of rubbing alcohol products, said General Director Lavaron Sangsnit.
According to Lavaron, the production of pure rubbing alcohol is sufficient for domestic demand with a capacity of 2.32 million liters per day.
Major manufacturers of pure rubbing alcohol include the Liquor Distillery Organization (LDO), manufacturers of distilled spirits with a strength of 80 degrees or more, and a group of industrialists that use ethanol as a fuel.
Ethanol is 99.8-99.9% purified alcohol made from cassava or leftover sugar mixed with unleaded gasoline to make gasohol, a fuel used in the transportation sector. Alcohol has to be 70% pure to kill the Covid-19 virus.
The LDO has a production capacity of 60,000 liters per day and 18 million liters per year. Distilled spirits producers have a production capacity of 365,000 liters per day and 100 million liters per year.
The group of industrial operators that use ethanol as a fuel has a production capacity of 6.6 million liters per day for a daily mixture with an oil volume of 4.4 million liters. The remaining volume of ethanol is used as fuel every day.
These three groups have manufactured pure rubbing alcohol and convertible alcohol and supplied them to the medical and energy markets.
The pandemic resulted in a significant increase in demand for pure rubbing alcohol and convertible alcohol, particularly in the medical and healthcare industries. In March, policy makers lifted a restriction that was preventing ethanol producers from making other forms of alcohol. In conjunction with this, the Excise Duty Department has removed the excise duty on spirits that are over 80% alcohol and are made into an ingredient to make disinfectants. Liquor companies are allowed to donate alcohol to make hand sanitizer.