Ekniti Mandates Excise Tax Overhaul to Counter Import Advantages Under FTAs

Thailand’s finance minister orders an urgent automotive excise tax review to level the playing field for local manufacturers against cheaper FTA imports.

Thailand’s Ministry of Finance is accelerating a comprehensive overhaul of the country's automotive excise tax structure across all vehicle categories—including internal combustion engines (ICE), hybrids, and electric vehicles (EVs).

The policy shift aims to establish a level playing field for domestic manufacturers and eliminate a longstanding tax disparity that allows vehicles imported under Free Trade Agreements (FTAs) to undercut locally produced units.

The directive follows recent announcements by Ekniti Nitithanprapas, Deputy Prime Minister and Minister of Finance, who confirmed that the ministry is evaluating excise tax reductions for automakers that establish local production hubs and source domestic components.

Ekniti revealed he has instructed the Excise Department to urgently review and restructure current automotive rates. The objective is to restore market equity and support manufacturers that commit genuine capital investment and create local employment within Thailand.

According to the minister, the existing tax framework contains structural limitations and inequities stemming from preferential customs duties granted under various bilateral and regional FTAs.

"Today, we can see that the import tariff structure contains clear disparities," Ekniti said. "Certain country groups benefit from lower customs duties under FTAs, paying significantly less tax than others. This has created a direct constraint on our domestic industrial development."

Under the proposed adjustments, targeted excise tax reductions will serve as a primary mechanism to restore parity between pure importers and automotive brands operating assembly plants within the country.
 

Crucially, the government's relief measures and investment incentives will not be restricted to the electric vehicle sector. Instead, the framework will encompass traditional internal combustion engines and transitional hybrid technologies to protect the wider automotive ecosystem.

"Excise tax is a key instrument that can help deliver fairness among all vehicle manufacturers," Ekniti added. "This will apply not only to EVs but also to conventional internal combustion and hybrid vehicles."

Addressing broader industry demands—such as reductions on battery tariffs and renegotiations of specific FTA terms—Ekniti clarified that these matters will not be considered at this stage.

The government's immediate priority remains finalising the revised excise tax structure before evaluating further regulatory interventions.