ASEAN KEY DESTINATIONS
Thai auto tax reform delayed
The cabinet on Tuesday agreed in principle to revamp the automobile excise tax system based chiefly on carbon dioxide emissions, with staunch support from the Industry Ministry.
The Finance, Energy and Industry ministries were assigned to provide more details within 90 days, taking into account all types of emissions by all types of vehicles.
A senior executive of a leading carmaker questioned why the Industry Ministry rushed the proposal through the cabinet even as automakers had many questions.
Carmakers have asked for a one-year delay in the new tax, saying more study was needed to avoid adverse impacts on carmakers and related industries.
New investments, especially in engines, are needed to conform with the new rules, and automakers claim parts can't be changed quickly without significantly raising costs.
Others feel the new rule may encourage carmakers to import parts instead of producing them locally.
Industry Minister Chaiwuti Bannawat said carmakers were consulted repeatedly, making a delay unnecessary.
"The global automotive industry is focusing on the environment. The new tax regime is an incentive for carmakers to produce environmentally friendly vehicles," said Mr. Chaiwuti.
The auto executive did not understand the basis for the levels of gas emissions that determine the tax rate.
He added the Industry Ministry left unmentioned the tax privileges granted to CNG- and gasohol-powered vehicles that emit less pollution.
"The ministry wants CNG and gasohol vehicles to comply with the new regime without taking into consideration the alternative fuels they use. Yet some carmakers have invested substantially to produce vehicles that run on alternative fuels," he said.
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