Thai rubber producers want change in export tax -trade body

* Industry body wants shift to flat rate of tax

* Says would help compete with Malaysia, Indonesia

By Apornrath Phoonphongphiphat

BANGKOK, Aug 18 (Reuters) - Thai rubber producers want the military government to change the system of taxes on exports of the soft commodity to help them compete with rivals such as Malaysia and Indonesia, an industry body said on Monday.

Rubber exporters in Thailand, the world's biggest shipper of the material, want a cut in the level of duty or to shift to a flat rate of taxation from the current system, under which the rate changes depending on market prices.

"We want the government to be flexible. It would be better if the government slashed the tax or collected the levy at a flat rate," Bundit Kerdvongbundit, secretary general of the Thai Rubber Association, told Reuters.

"Then, we could manage our costs and offer rubber at more competitive prices."

The current system was introduced in 2012 when rubber prices surged to record highs. Tax is charged at 3 baht per kg if rubber prices are between 80 and 100 baht, 2 baht if they drop below that, or 5 baht if they climb above 100 baht per kg.

Global rubber prices have tumbled more than 25 percent this year on persistent worries about demand from top consumer China and oversupply, with benchmark Thai smoked rubber sheet (RSS3) this month offered at $1.82 per kg (around 60 baht).

Luckchai Kittipol, honorary president of the association, said exporters would prefer the previous flat rate of 1.40 baht per kg, which he said was equivalent to the rate charged in Malaysia, the world's No.3 exporter.

Malaysian exports were this month offered at $1.70 per kg, well below Thai offers.

Indonesia, the world's second-biggest exporter, does not tax rubber exports. Its offer price was around $1.65 per kg.

"Applying the same flat rate as Malaysia would help us to export more rubber and would eventually help support farmers," Luckchai said.

According to the association, Thailand produced 4.2 million tonnes of rubber in 2013, of which 90 percent, or around 3.7 million tonnes, was exported.

Bundit said the association had sent a statement to the military government, expressing their concerns about the progressive-rate tax.

Senior military officials, who took control of the country in a bloodless coup on May 22, were not available for comment.

But Chanachai Plengsiriwat, a senior official in the agriculture ministry, said the committee which oversees the country's rubber sector would meet early next month and was expected to discuss export taxes.

(Editing by Joseph Radford)