New tax to promote EVs on the cards

New tax to promote EVs on the cards

PM2.5 dust particles blanket the sky as motorists drive along an elevated highway. (Photo by Arnun Chonmahatrakool)
PM2.5 dust particles blanket the sky as motorists drive along an elevated highway. (Photo by Arnun Chonmahatrakool)

The government and car companies are scheduled to meet next month to discuss a proposal to impose a higher excise tax on oil-powered vehicles as part of efforts to promote electric vehicles (EVs) and reduce air pollution.

The tax hike was suggested because the current excise tax structure for cars is due to end in 2025, and there is interest in considering a more appropriate rate, according to media reports citing a Finance Ministry source.

The source suggested the tax for internal combustion engines be the "highest" among car types to encourage people to shift to EVs.

Atthawit Techawiboonwong, general manager for external and government affairs at Nissan Motor Thailand, said the government called his company to talk about the tax increase proposal, which may take effect in 2026 as part of a plan to help the EV industry.

"Nissan will tell the government its ideas to promote the EV industry and stimulate demand," he said.

Mr Atthawit said many car makers previously told authorities that increasing tax alone is not enough. Other measures such as a corporate income tax rebate for companies buying EVs would be a good start, he said.

State agencies must set a model for EV usage, but this is impossible without amended state procurement regulations, which do not support the purchase of battery electric vehicles, said Mr Atthawit. 

"We have to consider various factors ranging from demand and prices to EV charging outlets," said Mr Atthawit.

Car companies are ready to follow EV policies because they make EVs and can import them in Thailand.

"But if buyers are not ready, we can't sell the cars. EVs are expensive. Are Thais ready to buy them?" he asked.

Car makers support an EV policy because it can help with harmful levels of PM2.5 dust, but they need clearer details, said Federation of Thai Industries (FTI) chairman Supant Mongkolsuthree. The FTI reported on Thursday the Thailand Industry Sentiment Index in November rose to 87.4 from 86 points in October.

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