The excise tax routine goals to make Thailand an EV hub

The electric vehicle excise structure is slated to be finalized this year to help establish Thailand as an electric vehicle hub, the excise department said.

Under the current excise tax structure, electric vehicles are tax-free from January 1, 2020 to December 31, 2022 for automakers that have been granted Board of Investment eligibility. The rates will be charged at 2% after 2022. Manufacturers who have not received any incentives are charged 8% tax.

This excise tax structure for automobiles encourages certain vehicle types to become product champions through tax incentives, for example through a tax rate of 14% for eco-cars, which should expire in 2025, said General Director Lavaron Sangsnit.

The government wants to promote electric vehicles, which means the excise department needs to develop tax policy to create a new product champion, Lavaron said.

The new car excise structure must highlight clean energy technology to support the use of electric vehicles, he said.

The department will consider the body and batteries of electric vehicles to make it easier for electric vehicle manufacturers to use Thailand as a manufacturing base rather than importing electric vehicles, Lavaron said.

Thailand is a regional hub for vehicles with internal combustion engines.

Domestic worker skills in the auto industry could be a strength to attract EV manufacturers, he said. There are reports that Tesla Inc, a leading American electric vehicle and clean energy company, is speaking with the Indonesian government about possible investments in the country.

Widespread use of electric vehicles in Thailand has not been expected for at least 10 years, Lavaron said.

The department has adapted to weak demand for oil and low global crude oil prices by levying a levy on carbon emissions, he said.