07 Jan 2021
Posted in Automotive
Vehicle excise tax restructuring to support EV sales in Thailand, says GlobalData
The restructuring of vehicle excise tax, which is under study and tentatively planned to be implemented by 2026, will act as a catalyst to Thailand’s electric vehicles (EVs) sales and consequently, its roadmap. The country aims to achieve 30% share of EVs in total production by 2030, says GlobalData, a leading data and analytics company.
The vehicle excise tax restructuring, presently under discussion with the industry stakeholders, will be a significant move when implemented that will pave the way for increased adoption of eco-friendly vehicle and EVs in Thailand. The vehicle excise tax structure in Thailand levy tax based on emission rate of Carbon Dioxide (CO2) while the restructuring is aimed at increasing the tax rate on the IC engine vehicles to the highest among all the vehicle categories. The move will help to bring down the price differences in IC engines and electric vehicles and make the EVs a more favourable product.
The move is anticipated to gain support from the government as well as OEMs as the country has been struggling with harmful PM2.5 levels in the country. The present vehicle excise tax varies between 20-50% for IC engine vehicles depending upon the type of vehicle and the engine capacity. For hybrid electric and fuel cell vehicles, the current tax rate is 10%, according to The Excise Department.
Bakar Agwan, Senior Automotive Consultant at GlobalData, comments: ‘‘The excise tax restructuring will support the existing government efforts for EV ecosystem development in Thailand. The government has been putting in other efforts to make EV a success story in Thailand which includes a possible car trade-in scheme on cards.”
This will stimulate the EV purchases in the country strengthening the EV infrastructure and also bagging new investments with new set of manufacturing privileges announced by the Board of Investment (BOI) Thailand.
Agwan concludes: “The governmental push through favourable policies is mandatory for increasing the EV adoption. While most of EV boosting efforts by the government were focused on the supply/manufacturing side, the new vehicle tax and the possible car trade-in scheme will stimulate the demand/customer side. Thailand needs more such demand-side efforts in terms of incentives, subsidy, tax benefits etc. to witness an upsurge in EV adoption.”