Luxury car dealers want lower duties

Luxury car dealers want lower duties

Luxury car importers are requesting the Customs Department cut import duties and deductible expenses. (Photo by Somchai Poomlard)
Luxury car importers are requesting the Customs Department cut import duties and deductible expenses. (Photo by Somchai Poomlard)

The Customs Department plans to complete its consideration of luxury car importers' proposals in one month, as the group is requesting a cut in import duties and an increase in deductible expenses.

Luxury car importers have complained that an import duty of 80% of cost, insurance and freight (CIF) is too high, as the combined rate is 328% when other taxes -- vehicle excise tax, value-added tax (VAT) and local tax -- are taken into account, said Kulit Sombatsiri, director-general of the Customs Department, after a meeting with authorised and independent luxury car dealers and the Department of Special Investigation (DSI).

Customs allows car importers to deduct expenses incurred ahead of importing vehicles, at 43.6% on average for European vehicles and 37% for Japanese cars.

The department may consider average expenses before imports are disclosed on the balance sheets of overseas luxury car dealers as most of them are listed companies, he said.

The department and the DSI have launched a series of crackdowns on false declarations of the import prices of vehicles, with hundreds of supercars being seized so far this year. The Customs Department recently said it will claim 4.2 billion baht in import duties for the 230 luxury cars seized from importers.

The seizure has triggered a backlash from importers.

Supercar importer Panusak Techaterasiri, aka Boy Unity, filed a 50-million-baht lawsuit against the DSI in June claiming the raids on his showrooms were unwarranted and dealt his company a heavy financial blow.

Mr Kulit said the tax-collecting agency has already adjusted CIF for luxury imported cars based on the DSI's instructions, which were more stringent than the department's previous criteria.

The General Agreement on Tariffs and Trade requires importing countries to compute import duties based on prices declared in tax invoices from exporters, with the exception of suspicious declarations.

Some importers do not present tax invoices issued by exporters, saying they have been lost, and the Customs Department does not know the exact CIF of those imported cars, he said.

Customs Department deputy director-general Chaiyut Kumkun said the adjustment of the import tax computation process at this time will result in fewer imported luxury cars.

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