The cabinet on Tuesday approved a package of customs duty and excise tax measures to promote the electric vehicle (EV) industry and reduce carbon monoxide emissions.
Finance Minister Arkhom Termpittayapaisith said the cabinet passed a draft ministerial announcement on a reduction in the excise tax rate and customs duty exemption for completely built-up (CBU) units of battery electric vehicles (BEVs).
Under the approved measures, BEVs with a retail price of up to 2 million baht are entitled to a lower import duty of 40%, down from 80%.
For BEVs with a retail price of between 2-7 million baht, import duties dip from 80% to 60%. This reduction is awarded to CBU units only and is expected to cost the government about 60 billion baht in revenue.
Mr Arkhom said such tariff cuts shrink the state coffers initially, but this would be offset once EV makers set up plants and hire workers to manufacture here, later paying related tax to the country.
Government spokesman Thanakorn Wangboonkongchana said the latest incentives apply to six types of vehicles once the ministerial regulations come into force.
The new rules come in effect the day after they are published in the Royal Gazette.
The incentives apply initially to 27 models of six types of EVs comprising plug-in pickups; EVs with 10 seats or less; eco-cars with 10 seats or less; plug-in four-door passenger pickups; electric pickups; and hydrogen fuel cell-powered trucks.
Tuesday's measures came after the cabinet approved last Tuesday a package of incentives including tax cuts and subsidies to promote EV consumption and production between 2022-2023. The subsidies range from 70,000 baht to 150,000 baht depending on the type and model of vehicles.
The cabinet approved measures to promote the domestic manufacturing of EVs, including exemption of import duties on significant electrical parts between 2022-2025. The electrical parts include batteries, traction motors, compressors for battery EVs, battery management systems, drive control units and reduction gear.
The government wants Thailand to become a global hub for EV and parts production, as well as the use of zero-emission vehicles of all types. The country wants the manufacture of domestic EVs to account for at least 50% of total domestic production by 2030.
The cabinet also approved last week 3 billion baht from the central budget in fiscal 2022 to fund the subsidy programmes.
In addition, the cabinet agreed in principle to provide a budget of 40 billion baht between fiscal 2023-2025 to promote EV consumption.