Thailand plans yet another tax reduction for electric cars, 3-year tax holiday is just the beginning

Arif · Nov 17, 2020 01:00 PM

Thailand plans yet another tax reduction for electric cars, 3-year tax holiday is just the beginning 01

Despite the existing incentives for electric vehicles in Thailand, Finance Minister Arkhom Termpittayapaisith wants the Excise Department to reconsider which components of EVs deserve improved tax reductions to make them more enticing to consumers.

Thailand plans yet another tax reduction for electric cars, 3-year tax holiday is just the beginning 02

Electric cars in Thailand are already on a three-year tax holiday under the current excise tax structure in Thailand. (Jan 1 2020 to Dec 31 2022). This applies to car makers granted with Board of Investment (BoI) privileges*.

* Manufacturers that did not receive incentives are charged 8% tax.

Thailand plans yet another tax reduction for electric cars, 3-year tax holiday is just the beginning 03

Bangkok Post reports that the goal of studying the excise tax structure is to promote industry development and lower the price of EVs.

The current EV incentives in Thailand is an improvement from the 2018 incentives which imposed 2% excise tax on electric cars.

The 2020 package includes a three-year tax holiday for manufacturers of plug-in hybrid vehicles and a maximum eight-year corporate income tax waiver for BEV producers.

Thailand plans yet another tax reduction for electric cars, 3-year tax holiday is just the beginning 01

This is all part of the Thai 2030 EV roadmap which aims for EVs to account for 30% of total annual car production by 2030 (750,000 out of 2.5 million) .

The incentive package is rather holistic as it covers all major aspects of the supply chain. The package focuses on:

  • BEVs
  • local production of significant parts
  • commercial vehicles of all sizes

The 2018 package mainly focused on cars and passenger vehicles.

Thailand plans yet another tax reduction for electric cars, 3-year tax holiday is just the beginning 02

Expanding the idea of sustainable living, Mr Arkhom also wants the excise tax structure on electronic appliances to be studied by the excise department. 

Sounding extreme to some, car air conditioners are imposed a 15% excise tax. (residential air conditioners are not taxed)

Thailand plans yet another tax reduction for electric cars, 3-year tax holiday is just the beginning 03

The Honda e is not officially sold in Thailand.

Adding on the current incentives, new incentives may be offered to manufacturers of energy-saving products (above the existing criteria). Naturally, tax penalties will be implemented on products that do not meet the energy saving criteria.

Thailand’s move towards a sustainable future is aggressive and plausible.

Arif

Writer

Previously an engineer in an automotive manufacturing company and a highway concessionaire. A part-time research student on biofuels and diesel engines. Obsessed with vehicle electrification and the future of transportation.

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