The Excise Department is preparing restructure tax rates on automobiles to support the transition from internal combustion engine (ICE) vehicles to future mobility technologies, including electric and hydrogen-powered vehicles
The goal is to use excise taxes as a tool to promote sustainability by balancing revenue generation with economic outcomes to enhance competitiveness, said director-general Kulaya Tantitemit.
Excise tax rates on batteries will be restructured to promote the use of efficient batteries, she said. Tax criteria will be based on energy density (energy per unit of weight) and life cycle (charge-discharge cycles), said Ms Kulaya.
In addition, she said, a carbon pricing mechanism would be introduced within the excise tax structure for oil and oil products.
Although the excise tax burden on these products will increase, it has been designed not to affect the public, said Ms Kulaya.
The carbon tax is being prepared for submission to the cabinet. The tax rate will be set at 200 baht per tonne of carbon dioxide equivalent, multiplied by the emission factor. Since different types of fuels emit varying amounts of carbon, the carbon tax burden will vary for each type of fuel or oil product.
The EV Board earlier approved low tax rates for hybrid and “mild hybrid” vehicles for a period of seven years. This is intended to support the transition from ICE vehicles to EVs in the future. The board also resolved to restructure excise tax rates for hybrid vehicles, introducing a fixed rate for seven years (2026-32), replacing the previous policy of incremental tax increases.
Hybrid vehicles emitting no more than 100 grammes of CO2 per kilometre travelled face a fixed excise tax rate of 6% from 2026 to 2032. The rate is 9% for emissions of more than 100 grammes but less than 120 grammes.
Measures to support hybrid vehicles represent a change from the previous policy, under which the excise tax rate would have gradually increased by 2% per year from 2026.
The EV Board also resolved to support mild hybrid vehicles, which are powered by internal combustion engines supplemented by electric motors to improve performance.
These vehicles are considered a transitional technology toward the adoption of EVs in the future. The board believes Thailand has the potential to manufacture this type of vehicle.
The tax measures supporting mild hybrid vehicles specify that vehicles emitting no more than 100 grammes of CO2 per kilometre travelled will be taxed at a rate of 10% from 2026 to 2032, while vehicles emitting more than 100 grammes will be taxed at 12%.
The tax rates for mild hybrids are higher than those for other hybrids, but lower than those for internal combustion engine vehicles.
