Thai Finance Ministry weighs excise cuts for domestic car production
Firms investing in Thai production with domestic inputs would receive lower rates; importers of finished vehicles without local factory investment would face higher excise tax.
- Thailand's Finance Ministry is considering reducing excise tax rates for businesses that establish production bases in the country.
- To qualify for the tax cut, companies must use raw materials or components sourced from the domestic supply chain.
- The policy aims to attract investment, as businesses importing fully assembled vehicles will continue to face higher tax rates.
- A full review of the proposal is expected to be completed and submitted to the Cabinet by the end of September 2026.
Ekniti Nitithanprapas, Minister of Finance, said the Ministry of Finance was considering reducing excise tax rates for businesses that choose to invest in establishing production bases in Thailand.
The aim is to encourage investment in future industries, strengthen competitiveness and ensure fairness for businesses.
However, businesses establishing production bases would qualify for lower excise tax rates only if they meet a key condition: they must use raw materials or components produced domestically as part of a local supply chain.
By contrast, businesses importing fully assembled vehicles for sale without investing in manufacturing plants in Thailand would continue to face higher excise tax rates.
This is intended to ensure that investors are not placed at a disadvantage and to attract genuine investment capital.
The review of all details is expected to be completed by the end of September 2026, before the end of the fiscal year, in preparation for submission to the Cabinet.
Customs duty measures will continue to focus on protecting Thai small and medium-sized enterprises (SMEs) from an influx of foreign goods.
The Customs Department and the Revenue Department are currently working together to implement measures to collect tax and value-added tax (VAT) on all imported goods valued at THB1 or more.
The measures were introduced in response to technology-driven changes in trading behaviour, which have led to an increase in small shipments of imported goods.
Collecting tax on imports valued at THB1 or more is therefore an important mechanism for creating a level playing field between foreign goods and products made by domestic SMEs.
