Thailand has plans to align automobile excise tax to vehicle emissions, moving away from the current system of tax based solely on engine capacity. This proposal by the Industry Ministry was agreed in principle by the Thai cabinet last week, and the Finance, Energy and Industry ministries have been given three months to study the issue.
One of the early proposals include a flat rate of 30% on vehicles below 3,000 cc. Of these, vehicles emitting less than 150 g/km would have 5% shaved off the 30%, while those emitting over 200 g/km will incur an extra 5%. Models that fall in between 150 and 200 g/km will be taxed 30%. Cars with engines larger than 3.0 litres will be taxed 50%, as per the current rate.
Understandably, not all are embracing this new idea with open arms. Thailand is a major producer and consumer of pick-up trucks, and they aren’t the most clean vehicles around. At present, trucks and SUVs are taxed lower than passenger cars at 3-20%, depending on type. The auto industry is also seeking for an adequate grace period.
“We agree in principle that the tax system should be revamped, but we want to achieve this goal smoothly since the restructuring will affect not only automobile manufacturers, but also parts suppliers. Our stance is to ask for time to adjust ourselves,” said Payungsak Chartsutipol, chairman of the Federation of Thai Industries.
“I really hope to see the government thinking about this aspect cautiously and transparently. The developed countries that designed tax rates based on emission spent many years to find the best solution,” he warned.
What do you think of this move? Is this a good example for Malaysia to follow?
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AI-generated Summary ✨
Comments generally support the idea of aligning excise tax with CO2 emissions to promote environmentally friendly vehicles and reduce global warming, with noted benefits for hybrids, electric vehicles, and low-emission cars. Several believe Thailand's approach is a good example and suggest Malaysia should adopt similar policies. Some comments highlight the need for a dynamic and progressive tax system based on fuel efficiency and emissions rather than engine capacity, arguing it would be fairer and promote cleaner engines. Others point out the protectionist policies for Proton and Perodua, questioning whether local manufacturers would be impacted. There is consensus that such measures could improve Malaysia's environmental footprint, but some express skepticism about implementation challenges and existing tax structures. Overall, the sentiment favors moving toward emissions-based taxation to encourage greener vehicles.