A new excise tax structure is estimated to boost the tax-collecting department's revenue from motorcycles by 30-40% per year, says a senior official.
The Excise Department is expected to fetch an additional 600-800 million baht per year from around 2 billion after the cabinet agreed on Tuesday to tax motorcycles based on carbon dioxide (CO2) emissions, said Nutthakorn Utensute, director of the Tax Planning Bureau.
The tax burden under the new structure averages 100-800 baht per motorcycle, he said. Roughly 90% of the 1.5 million locally-made motorcycles sold each year have engines sized below 150cc, which are tax-exempt under the existing structure.
The new tax, which will come into force from Jan 1 next year, is aimed at reducing ultra-fine PM2.5 dust particle emissions and promoting cleaner vehicles, he said.
Under the new tax structure, CO2 emissions determine the levy rate, not engine size, said Mr Nutthakorn.
According to the new excise tax structure, electric motorcycles will be taxed 1%, fuel-based or hybrid motorcycle with CO2 emissions of up to 50 grammes per kilometre (g/km) are liable for a 3% tax, 51-90g/km at 5%, 91-130g/km at 9% and more than 130g/km at 18%, while other types of motorcycles will be charged 20%.
He said the cabinet also approved postponing the implementation of the single tax rate of 40% on the suggested retail price of cigarettes for another year to Oct 1, 2020.
The postponement came after consumption of hand-rolled cigarettes surged to 26 million kilogrammes per year from 12 million before 2017, when the current excise tax on cigarettes took effect, said Mr Nutthakorn.
Hand-rolled cigarettes are considered to be more harmful to health than factory-made cigarettes because they do not have filters.
Under the existing excise tax structure, cigarettes are liable to be taxed both in terms of volume and value, regardless of price. The levy in terms of volume was raised to 1.20 baht per cigarette from 1.10 baht, while the tax based on value is divided into two rates: 20% of suggested retail price for cigarettes priced below 60 baht per pack and 40% for those priced more than 60 baht.
The cabinet also approved hiking the excise tax on tobacco to 10 satang per gramme from 0.5 satang to narrow the retail price gap between factory-made and hand-rolled cigarettes, he said.
The resulting difference has been lowered to 17 times from above 300 times, said Mr Nutthakorn.
