Car makers seek clarity on excise tax

Car makers seek clarity on excise tax

The government is being urged to come up with a clearer excise tax on vehicles so that car makers can plan production accordingly.

"What the government has approved is only a broad concept, with no detailed policy on how to support segments like hybrids or electric vehicles and related technologies that help reduce domestic oil use," said Kwanchai Paphatphong, president of Inter-Media Consultant Co, which runs the Thailand International Motor Expo.

The Yingluck Shinawatra government late last year approved a new tax structure basing tax calculations on carbon dioxide emissions, rather than engine size as in the prevailing structure.

Under the new tax regime, a normal eco-car will be charged 17%. The rate falls to 12% for an E85-compatible eco-car. Cars with a large engine of 3,000cc or more will be charged a 50% rate.

One-ton pickups will be taxed at 3%, with the rate rising to 5% if emissions exceed 200 grammes per kilometre.

The government also offers a three-year adjustment period for car makers.

While most car companies have agreed in principle with the reforms, they say they need at least five years to prepare and adjust to the new taxes.

Pickup trucks in particular would be hit hard because their product cycles are longer than those of passenger cars.

Mr Kwanchai said it remains unclear how the government will support ethanol-based fuels.

"The government always changes its energy policy," he said. "A few years ago it announced a plan to support E20 fuel, but now the support has changed to E85. Automakers cannot adjust their technology and car models to match these uncertain policies."

In related news, Inter-Media Consultant expects 50,000 orders to be placed at the 30th Motor Expo 2013, running Nov 29-Dec 10.

Last year's show saw an all-time high of 85,904 orders, as buyers rushed to take advantage of an expiring tax rebate under the first-time car buyer scheme.

Some 76 billion baht circulated during the show, according to organisers.

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