Excise System On Cars Next In Line For Adjustment: Thailand

[webfact]

Excise system on cars next in line for adjustment

WICHIT CHAITRONG

THE NATION

BANGKOK: -- Restructuring of the excise tax on automobiles is in the pipeline after the tax hike on cigarettes and liquors, in line with global trends aiming to limit emissions of carbon dioxide, says the Finance Ministry.

Possible tax increases on beer and wine are also under study.

Currently carmakers in Thailand are mainly serving domestic demand delayed by the devastating flood last year, Deputy Finance Minister Thanusak Lekuthai said yesterday.

"When the manufacturers fully recover from the floods and the government's first-car scheme comes to an end, the export market next year will again be the main driver for passenger-car production," he said.

To survive, carmakers will need to produce vehicles that meet international standards.

"The global market will force changes in car technology, we need not to use excise tax to force them first," said Thanusak. ?? this contradicts the lede?????

"The key reason the ministry has not put in place a new tax structure yet is that car manufacturers were hit hard by last year's floods."

Benja Louichareon, director-general of the Excise Department, said a new car tax would aim to limit the emission of carbon dioxide, instead of promoting power efficiency under the current eco-car scheme.

Under the proposed new tax structure, the lowest rates would be applied to passenger cars that discharge no more than 100 grams of carbon dioxide per kilometre. The next-lowest rate would be applied to cars not exceeding 150g/km, and the next rate to those emitting no more than 200g/km.

A punitive rate would be applied to those releasing more than 200g/km.

She said the existing tax incentives did not work as envisaged by the department. For example, those who drive passenger cars that could run on E85 (fuel that is 85 per cent ethanol) or E20 use E10 instead.

Currently, the tax rates for cars powered by E85 vary from 22 per cent to 32 per cent, depending on the level of engine power.

Hybrid-electric vehicles with no more 3,000 cubic centimetres of cylinder capacity currently enjoy the lowest tax rate of 10 per cent. Cars retrofitted for natural gas for vehicles also enjoy tax incentives.

Benja views these different tax rates as complicated and not achieving the intended goal.

INCENTIVES

The department has to consult more with auto-manufacturers before changing the tax incentives, she said, adding that she understood the industry had invested a lot of money to meet the current tax-incentive criteria.

The European Union has adopted a carbon-dioxide emission limit as the region aims to promote environmentally friendly technology.

Some carmakers have asked for an adjustment period of three to five years. Benja also said the department was studying whether to increase taxes on beer and wine. But as the rates have already reached the legal ceiling of 60 per cent of value or Bt100 per litre, the department would have to propose an amendment of the excise law to the government.

-- The Nation 2012-08-23

[JeffreyMcCollum]

Where I cam from there was a big storm that passed through causing a good amount of damage.

10 years later they were still blaming the storm for this and that. I wonder how long the floods will be blamed for things here.

IMO I don't think they have a new system well thought out yet.

And I see it as a way to raise money for all these programs and give aways not really used for roads or drivers education.

[richard10365]

With import taxes dropping on imports from ASEAN automobiles by 2015 (SOURCE) the average consumer won't notice the government taking advantage of the AEC (free trade) benefits. The disappearing additional cost in the form of an import tariff will be replaced in the form of an excise tax. Prices should stay the same as the benefit to the free trade agreement is taken from the Thai consumer and given to the government.

[manjara]

" I don't think they have a new system well thought out yet."

I think that's what the article said! Lol. When do they have anything well thought out? I hear the staff parties at Singh beer brewery are not much good either.

[Javabear]

The people in power are doing their best to try and kill what is left of the economy.

[steelepulse]

With import taxes dropping on imports from ASEAN automobiles by 2015 (SOURCE) the average consumer won't notice the government taking advantage of the AEC (free trade) benefits. The disappearing additional cost in the form of an import tariff will be replaced in the form of an excise tax. Prices should stay the same as the benefit to the free trade agreement is taken from the Thai consumer and given to the government.

I agree, protectionism rebadged as excise tax to protect local interest. You can bet this same tact will be taken on any future free trade agreements where the locals have a vested interest in not competing on a global scale.

[mogandave]

Cars produced in Thailand are global quality. Pickups and small cars are also competitively priced.

Raising the excise tax would affect both domestic and imported cars.

So the locals are most concerned about the livelihoods of the locals, who’d a thought?

[Puwa]

"The global market will force changes in car technology, we need not to use excise tax to force them first," said Thanusak. ?? this contradicts the lede?????

The Nation just gets shabbier and shabbier. Here we are privy to the editor complaining to the writer that the article doesn't make sense.

[terryp]

Wake me up when they know what they are doing

[pointoffew]

A restructuring is well overdue.

For example, as it stands now, there is not enough logic in the excise imposed on cars. For example, a 3.0 litre Diesel Toyota Fortuner is far more polluting yet taxed far less than a 2.0 litre Diesel Chevrolet Captiva. Utterly ridiculous, but it's a fact. And this issue is NOT related to import issues, solely to a brainless scheme, which was probably designed under the influence of substances.

[technologybytes]

Cars produced in Thailand are global quality. Pickups and small cars are also competitively priced.

Compared to what? Certainly local build Japanese cars are NOT the same quality as Japanese build Japanese cars!

Competitively priced? No, certainly not comapred to the USA.

Edited August 23, 2012 by technologybytes

[minikev]

A restructuring is well overdue.

For example, as it stands now, there is not enough logic in the excise imposed on cars. For example, a 3.0 litre Diesel Toyota Fortuner is far more polluting yet taxed far less than a 2.0 litre Diesel Chevrolet Captiva. Utterly ridiculous, but it's a fact. And this issue is NOT related to import issues, solely to a brainless scheme, which was probably designed under the influence of substances.

The substance was passed under the table

[mks222]

Cars produced in Thailand are global quality. Pickups and small cars are also competitively priced.

Compared to what? Certainly local build Japanese cars are NOT the same quality as Japanese build Japanese cars!

Competitively priced? No, certainly not comapred to the USA.

The locally manufactured cares comply with the exact same quality standards as the same models built elsewhere. For all intent and purpose they have equivalent quality.

The manufacturing cost is also pretty similar. The cost to the consumer is skewed because of (vastly) different tax structures.

[Chupup]

AHAAAA, i see the PEOPLES party is protecting the poor from getting rich, any more hikes in the pipe line ( well thought out of course ) ...................

[Tatsujin]

Pickups and small cars are also competitively priced.

Since when? The costs of a new (or even 2nd hand car) here are FAR more than anywhere else in the western world . . . knocking on for 2 or 3 x times the price depending on the make/model.

[DoctorG]

Wake me up when they know what they are doing

Enjoy your sleep. It will be a while yet.

[rfukata]

Cars produced in Thailand are global quality. Pickups and small cars are also competitively priced.

Compared to what? Certainly local build Japanese cars are NOT the same quality as Japanese build Japanese cars!

Competitively priced? No, certainly not comapred to the USA.

Yes absolutely correct. I lived in Japan for 18 years and know the difference btw Jpnse built cars in Japan versus cars

manufactured in Thailand.

Secondly, the retail pricing of cars in Thailand are higher i.e. the sticker price of

Corolla/Altis was 15% higher than a US Toyota dealer in Hawaii and Hawaii is significantly higher compared to the rest of the 49 states.

I have a 2010 2.5 Hilux J (tacoma) truck, the cheapest model avail. in Thailand and I compared it against the cheapest Tacoma

model which included the airbag and defroster and still the US model was about 15% lower than the Thailand Hilux J model.

[khunken]

Cars produced in Thailand are global quality. Pickups and small cars are also competitively priced.

Compared to what? Certainly local build Japanese cars are NOT the same quality as Japanese build Japanese cars!

Competitively priced? No, certainly not comapred to the USA.

Yes absolutely correct. I lived in Japan for 18 years and know the difference btw Jpnse built cars in Japan versus cars

manufactured in Thailand.

Secondly, the retail pricing of cars in Thailand are higher i.e. the sticker price of

Corolla/Altis was 15% higher than a US Toyota dealer in Hawaii and Hawaii is significantly higher compared to the rest of the 49 states.

I have a 2010 2.5 Hilux J (tacoma) truck, the cheapest model avail. in Thailand and I compared it against the cheapest Tacoma

model which included the airbag and defroster and still the US model was about 15% lower than the Thailand Hilux J model.

I disagree as far as quality is concerned. Japanese cars here are produced to the same standard of quality as cars produced in Japan or Europe. Cars manufactured here are exported to various countries, for example Australia. Pickups are exported to the USA. I have owned a number of Japanese cars in various countries, including Thailand & the cars produced here are as good as any.

Price-wise I would agree & this is due to higher taxes here.

[SOTIRIOS]

.duh.....where do tax dollars end up.......

[belg]

i read : thai carmakers better start to invend flood proof cars that can float

now that would be high tec

[tragickingdom]

adjusting is not the same as "rising". It makes perfectly sense to make pickups and SUV's much more expensive and small and electric cars free of tax.

[Travelman868]

Prices in the USA have always been cheaper than most other countries. Same with Gas (petrol)

Most western countries now tax vehicles on their CO2 emissions and Thailand could do the same. However they do have a problem with older vehicles. We have all followed vehicles belching out smoke, what would they do about these.

In western countries they woulld be taken off the road but its not so easy in Thailand.

[transam]

Wake me up when they know what they are doing

Coma comes to mind.

[Tywais]

For example, those who drive passenger cars that could run on E85 (fuel that is 85 per cent ethanol) or E20 use E10 instead.

Could that be because there was never an effort to put any support in offering these two options at the stations?

[NoshowJones]

i read : thai carmakers better start to invend flood proof cars that can float

now that would be high tec

There is such a thing, they are called boats.

[harrry]

Cars produced in Thailand are global quality. Pickups and small cars are also competitively priced.

Raising the excise tax would affect both domestic and imported cars.

So the locals are most concerned about the livelihoods of the locals, who’d a thought?

Some cars prodiced in Thailand are global quality. Some are not. Cars are produced here to varying specifications depending where they will be sold. The Vigo for example sells in Australia but the version produced for local sale would not meet the Australian specification. They are built to a different standard depending on where they go.

[Briggsy]

The key factor to these excise changes will be to protect the interests of dynastic political families involved in supplying Thai-made parts to the large Japanese car assembly plants here. Thai Summit is a very good example.

[crazyswede]

This start to smell like Sweden and i just got here!

[Unkomoncents]

The problem with raising taxes is that no one has any clue where the increased revenue is going. Those that care are left guessing as to whether or not the revenue is supposed to offset budget deficits or just finance fancy houses for higher-ups in the Customs Department. Government spokespeople, as usual in Thailand, seem to think that the public (everyone, including readers of The Nation here) is incapable of seeing benefits beyond the stated environmental ones. It's great that they care about the environment (even though we all know that there isn't a soul in the Kingdom who cares about trees and wildlife more than money), but where are these tax revenues going?! Usually, they should be funneled back into investment and government development projects. In Thailand, the prices keep going up but the salaries for 90% of the country remain static (regardless of the completely disingenuous and demonstrably failed 300 BHT minimum wage project) and there are no near-future infrastructure projects in the pipeline. Where is all the tax money going? No one really seems bothered enough to ask on a serious level here. Until they start showing where government revenue goes, I will we be forced to assume that this is just another exercise in pure corruption compliments of Thailand.

Edited August 23, 2012 by Unkomoncents

[ripstanley]

With import taxes dropping on imports from ASEAN automobiles by 2015 (SOURCE) the average consumer won't notice the government taking advantage of the AEC (free trade) benefits. The disappearing additional cost in the form of an import tariff will be replaced in the form of an excise tax. Prices should stay the same as the benefit to the free trade agreement is taken from the Thai consumer and given to the government.

This is very true,

An excise tax in an economic terms is an inland tax ie a tax on locally produced goods http://en.wikipedia.org/wiki/Excise Thailand have used this terminology as an additional import duty. This means you pay Customs duty, excise duty and vat on some imported goods. When they have free trade aggreements like with Australia and Asean in 2015 then the only duty that is reduced is the Customs duty. Like earlier stated negative revenue loss