Japan’s request to Thailand accepted, duty waived

BANGKOK, Nov 29 – The cabinet on 29 November 2011 resolved to waive import duties for machinery, spare parts and finished goods through June next year to help entrepreneurs whose plants were damaged by floods, Deputy Prime Minister and Commerce Minister Kittiratt Na-Ranong said Tuesday.

The duty exemption will be applied to all industries to import tariff-free machinery and spare parts to replace those damaged by floods, said Mr Kittiratt.

Industry Minister Wannarat Channukul said for the auto industry, the Office of Industry Economics will issue the regulation in detail later. Initially, the timeframe for the imports is from Oct 25 this year through June 30, 2012.

Assembled cars, auto parts are also subject to tariff waiver to offset output loss during the flood. However, they must be the same or close to models that are normally produced in Thailand and the imported volume must not exceed the total number normally produced in the country.

Mr Wannarat said only Honda Motor Co, whose auto factory in Ayutthaya was flooded, will import completely built-up (CBU) cars for sale to offset its output loss.

Meanwhile, many auto parts plants were ravaged by the flood, causing supply chain disruption for other auto makers.

Mr Kittiratt said it cannot be concluded how much revenue the government will lose from waiving the import tariff because it must wait for entrepreneurs to identify the machine specifications, spare parts or finished products, which will be imported.

The approval was in response to a request by the Japanese private sector to the Thai government.

The request was lodged to Thailand when Mr Kittiratt met the Japanese prime minister, ministers and the business community during his recent trip to Japan.