First-car scheme gets the green light

The Cabinet has approved the Finance Ministry's proposed first-car buyer scheme, which is expected to help boost auto sales by as many as 500,000 vehicles in 2012, while as much as Bt30 billion is expected to be returned to buyers in tax rebates.

The rebates will represent the return of that part of the purchase price that is made up of excise taxes.

Industry Minister Wannarat Charnnukul said yesterday that the scheme would give tax rebates of up to Bt100,000 to first-time auto buyers from September 16 to December 31, 2012.

The Excise Department will begin issuing the rebates of up to Bt100,000 for each first-car owner after he or she has owned the car for one year. The tax rebate will be a one-off payment made in a lump sum by cheque from the department.

While first-time car buyers will get the tax refund, they will be bound to hold on to their cars for five years, said Deputy Finance Minister Boonsong Teriyaphirom.

Eligible vehicles include passenger cars with an engine capacity of no more than 1,500cc (including eco-cars) and pickups (including double-cab pickups) priced at not more than Bt1 million. Previously, the scheme covered only eco-cars and pickups.

The vehicles must be locally assembled - excluding those that are assembled from used imported parts - and the minimum age for buyers is 21.

To prevent profiteering, the vehicle has to remain in the possession of the first buyer for five years.

After the first year, the Excise Department or its local office will cross-check with the Land Transport Department or its provincial office, inspect the first-car ownership status and inform about the buyer's waiver of ownership-transfer rights for five years. The details will be inspected and recorded in the Land Transport Department's computer system and in the registration booklet.

The first-car buyer booklet and the copy of the registration with its five-year waiver of ownership-transfer rights will then be sent to the Excise Department or its local office, which will pay the rebate via bank cheques starting from October 1 next year.

"The tax rebate is expected to cost [the government] about Bt150 billion, assuming that 500,000 people will buy first cars," Boonsong said. Carmakers and financial institutions will meet with Excise Department officials today to discuss details of the package, he said.

The first-car tax rebate scheme was one of the Pheu Thai Party's populist policies aimed at luring voters in the recent election.