Thailand is preparing to adjust its excise tax structure for cars to be linked to the proportion of local content used in their production, Bangkok Post has reported.
Electric vehicles with a high proportion of domestically manufactured components will, in principle, be eligible for a lower excise tax rate compared to EVs with a lower amount of local content, said Thailand deputy finance minister Paopoom Rojanasakul. The objective is to support the Thai domestic automotive parts industry, he said.
The restructuring of excise tax for imported vehicles would thus be linked to the amount of local content, and there will be incentives to offer lower tax rates for components made locally in Thailand. Fully imported (CBU) vehicles are subject to higher excise taxes in Thailand.
“We want the automotive sector to increase the use of domestically manufactured parts by offering tax incentives,” Paopoom said.
Former Thai prime minister Thaksin Shinawatra said that Thailand should impose a high excise tax rate on imported EVs which have low local content.
The kingdom has free trade agreements with several countries which have resulted in a 0% import tariff on electric vehicles, which hampers the automotive industry of Thailand, and imported EVs should be required to contain a minimum level of local Thai content to protect its domestic industry, the former Thai PM said.
According to a Thai finance ministry source, the first category of vehicles to have excise taxes linked to local content will be pick-up trucks, Bangkok Post reported. The Asean-China free trade agreement was signed by Thailand with China around 20 years ago, which had set zero tariffs on imported vehicles including EVs.
In May, Thailand was reported to be set to revise its excise duty structure for plug-in hybrid vehicles (PHEVs) from 2026, in a move aimed at increasing both manufacturing prospects and consumer adoption of PHEVs.
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