Windfall from new car-tax 'not the motive'

The estimate is based on a projection that the Thai auto industry will be able to sell around 800,000 units domestically in 2016, compared with this year’s estimated of around 750,000 units.

“Nevertheless, the intention of the tax is to help protect the environment and the health of Thai citizens and to help with the development of the automobile industry, not because of the expected increase in tax revenue,” Somchai Sujjapongse, permanent secretary of the Finance Ministry, said in a joint press conference with the Industry Ministry yesterday.

The 2012 Cabinet resolution will come into effect on January 1, 2016, whereby automobiles releasing more than 200 grams of carbon dioxide per kilometre will be taxed at 35-40 per cent of a vehicle’s price, compared with only 14 per cent for those classified as eco-friendly models.

Meanwhile because of the changes in tax structure, the prices of passenger cars with 1,200cc engines is estimated to decrease by around Bt50,000 as the tax rate has decreased from 17 per cent to 14 per cent. 

 

Price increases 

Based on the tax rate increasing from 25-30 per cent to 35-40 per cent, the prices of cars with 1,500cc engines are estimated to increase by Bt85,000; by Bt95,000-Bt110,000 for 1,800cc models; by Bt110,000-Bt160,000 for 2-litre cars; and by Bt160,000-Bt500,000 for those over 2 litres.

Imported supercars are already taxed at a maximum of 50 per cent and there is no change there.

Industry Ministry permanent secretary Athit Wutkaro has said the ministry has concluded talks with automobile manufacturers and importers that had expressed concerns regarding the excise restructuring. They believed that the auto market in Thailand would likely face a big contraction due to higher production costs and prices of vehicles. 

He said impact would be minimal, since the increase in tax is only around 3-5 per cent and private operators have had three years to prepare for the measure. Meanwhile the ministry introduced an “ECO Sticker” in October pertaining to carbon-dioxide emissions to help car buyers identify environmentally friendly products. 

All cars sold from next month onwards will have these ECO Stickers. They will be issued by the Excise Department in cooperation with the Customs Department and the Industry Ministry. There will be a random inspection every year to keep track of the emission levels of each model. 

A total of 667 car models, about 90 per cent those in the Thai industry, have already received the stickers in preparation for sales next year. 

The process of acquiring the ECO Sticker has been cut to about a week after the inspection period of around 26-46 days based on the type of sticker (domestically manufactured or imported), the Industry Ministry says.