A PTT EV charging station at Bitec Bangna in Bangkok. The Excise Duty Department is investigating the restructuring of motor vehicle excise tax to facilitate the use of electric vehicles in Thailand.
The Excise Department is considering restructuring the entire vehicle excise tax to align measures to facilitate the use of electric vehicles and reduce fossil fuel consumption in Thailand.
The idea of restructuring the entire vehicle excise tax will depend on the direction of electric vehicle development in Thailand, General Director Lavaron Sangsnit said.
There is a government committee that oversees the systematic process of electric vehicle development in Thailand, including the development schedule and an approach leading to the full use of electric vehicles.
In the past, the department has adopted excise measures to support the outcome of government incentives while helping to minimize the use of outdated technologies and products that are not environmentally friendly.
For example, an excise measure has been applied to encourage the use of four-stroke motorcycle engines to prevent the use of two-stroke engines, which has resulted in higher air pollution.
Another example is that different excise duty rates have been applied to encourage the use of unleaded gasoline instead of regular gasoline.
These policies caused consumers to use products the government wanted to support and those it wanted to avoid disappearing from the market at some point, Lavaron said.
Other factors besides excise tax policies may encourage the widespread use of electric vehicles in Thailand, he said.
These factors include the selling price and depreciation cost of electric vehicles, both of which are higher than vehicles powered by an internal combustion engine.
Mr Lavaron said the government could use funds from the Energy Conservation and Promotion Fund to subsidize the sales prices of electric vehicles, but that would depend on government policies.
Investments in infrastructure to facilitate the use of electric vehicles are also crucial, for example in a power grid and charging stations.
Measures to encourage the use of electric vehicles, such as designating parking spaces for electric vehicles, could also be taken, Lavaron said.
Automakers want clarity from the government on eco-car tax incentives, as this policy is set to expire in 2025.
They want to know if the government continues to support green cars and what category of vehicle would fall under that tax incentive, along with a policy to encourage energy efficient cars, he said.
The excise department needs to clarify the excise tax structure for cars before 2025 so that operators have time to plan the direction of their business, Lavaron said.
The current consumption tax on electric vehicles is 8%. However, a consumption tax rate of 2% is applied to electric vehicles that have received investment subsidies from the Board of Investment (BoI).
In the period from January 1, 2020 to December 31, 2022, a rate of 0% will be applied as part of a BoI investment subsidy.
The excise structure is divided into four vehicle categories: passenger cars with seats for a maximum of 10 people; Pickups, which are passenger cars, double cabins and space cabins; Eco cars and cars that use E85 and B10 fuels; and electric vehicles.
The motor vehicle excise tax structure is based on carbon dioxide (CO2) emission rates. If a car has low CO2 emissions, it will be taxed less than a car that emits more CO2.