Agency to rejig PHEV excise tax conditions
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Agency to rejig PHEV excise tax conditions

New rules meant to help producers

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A hybrid car charges at a station in Bangkok. The Finance Ministry is proposing adjustments to the excise tax conditions for plug-in hybrid EVs to support manufacturers. KITJA APICHONROJAREK
A hybrid car charges at a station in Bangkok. The Finance Ministry is proposing adjustments to the excise tax conditions for plug-in hybrid EVs to support manufacturers. KITJA APICHONROJAREK

The Finance Ministry is poised to propose adjustments to the excise tax conditions for plug-in hybrid electric vehicles (PHEVs) to support manufacturers.

According to a source from the ministry who requested anonymity, the Excise Department is drafting amendments to these conditions, with key considerations including the electric range (ER) per charge.

The current requirement is 80 kilometres or more per charge. Another key condition is the fuel tank capacity, which is currently capped at 45 litres.

Vehicles meeting these conditions are subject to a 5% excise tax rate.

If the ER is less than 80km per charge and the fuel tank capacity exceeds 45 litres, the excise tax rate is 10%.

The source said the revised conditions will provide broader tax benefits for PHEV manufacturers. For example, some PHEV models have fuel tanks larger than 45 litres because they have bigger bodies, meaning the excise rate is 10%.

The proposed adjustment aligns with the government's policy to promote EV adoption, said the source, as PHEVs can operate on both fossil fuels and electricity, meaning they can serve as a transitional vehicle from internal combustion engine (ICE) cars to EVs.

Thailand's battery EV ecosystem is not fully developed, with an insufficient number of charging stations nationwide.

In December 2024, the EV Board approved a plan to restructure the excise tax for hybrid EVs (HEVs), reducing the tax rates from current levels.

The plan includes a fixed excise tax rate applied from the start of the new tax regime for seven years (2026-32), with the condition that a vehicle's carbon dioxide (CO2) emissions must not exceed 120 grammes per km.

For vehicles emitting up to 100g/km of CO2, the excise tax rate is 6%, rising to 9% for vehicles emitting 101-120g/km of CO2.

Automotive manufacturers and affiliates must invest at least 3 billion baht in Thailand between 2024 and 2027 to be eligible for this scheme.

This revision reduces HEV taxes from the previous structure, which set a gradual increase in tax rates every two years.

For example, under the previous structure, HEVs emitting up to 100g/km of CO2 had an excise tax rate of 6% in 2026, 8% in 2028, 10% in 2030 and so on.

The restructuring aims to maintain Thailand's long-established ICE vehicle manufacturing base, while providing automakers with a transition period to shift towards more environmentally friendly energy sources, such as electric mobility or hydrogen, according to the EV Board.

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