First-Car Tax Rebates Expected To Hit Bt85B: Thailand

[rubl]

Because that's what everyone needs in this country. More debt.

In comparison to most countries the consumer debt in Thailand is? Do you know? Or are you just blowing smoke?

Just what everybody needs, more debt. That's not the same as saying 'too much debt'. Mind you in Thailand Bank credit to private sector in percent of GDP grew from 140% 2000, down to 110% 2006 to 160% 2011.

This site give you the possibility to look and compare http://www.theglobal...pare-countries/

[chiangmaikelly]

Because that's what everyone needs in this country. More debt.

In comparison to most countries the consumer debt in Thailand is? Do you know? Or are you just blowing smoke?

Just what everybody needs, more debt. That's not the same as saying 'too much debt'. Mind you in Thailand Bank credit to private sector in percent of GDP grew from 140% 2000, down to 110% 2006 to 160% 2011.

This site give you the possibility to look and compare http://www.theglobal...pare-countries/

Yes it is. "Just what everybody needs, more debt." is the same as saying "Too much debt." Of course it is. What are you trying to start a useless semantic argument. The meaning is simple, too much debt is implied. The numbers you quote would be relevant if we were discussing the Thai banking sector as opposed to Thai people. If you want to be relevant talk about the amount of Thai personal debt that has increased as a result of the tax rebate and if that is high in comparison to other countries at full employment and with an expanding GDP.

[rubl]

Just what everybody needs, more debt. That's not the same as saying 'too much debt'. Mind you in Thailand Bank credit to private sector in percent of GDP grew from 140% 2000, down to 110% 2006 to 160% 2011.

This site give you the possibility to look and compare http://www.theglobal...pare-countries/

Yes it is. "Just what everybody needs, more debt." is the same as saying "Too much debt." Of course it is. What are you trying to start a useless semantic argument. The meaning is simple, too much debt is implied. The numbers you quote would be relevant if we were discussing the Thai banking sector as opposed to Thai people. If you want to be relevant talk about the amount of Thai personal debt that has increased as a result of the tax rebate and if that is high in comparison to other countries at full employment and with an expanding GDP.

You work for the Thai government or what?

The topic is 'first-car tax rebates expected to hit THB 85 billion. Related to this is the amount of private debt added (1.25m cars ==> THB 90 billion?) and a GDP expanded because of local populist policies. The outlook for export is not rosy, import still growing, rice rotting away. Now that needs some solid, scientifically based economics to explain its sustainability.

Edited December 29, 2012 by rubl

[Hugo6]

Because that's what everyone needs in this country. More debt.

In comparison to most countries the consumer debt in Thailand is? Do you know? Or are you just blowing smoke?

Just what everybody needs, more debt. That's not the same as saying 'too much debt'. Mind you in Thailand Bank credit to private sector in percent of GDP grew from 140% 2000, down to 110% 2006 to 160% 2011.

This site give you the possibility to look and compare http://www.theglobal...pare-countries/

and what in gods name does that have to do with consumer debt

[Hugo6]

Because that's what everyone needs in this country. More debt.

In comparison to most countries the consumer debt in Thailand is? Do you know? Or are you just blowing smoke?

Just what everybody needs, more debt. That's not the same as saying 'too much debt'. Mind you in Thailand Bank credit to private sector in percent of GDP grew from 140% 2000, down to 110% 2006 to 160% 2011.

This site give you the possibility to look and compare http://www.theglobal...pare-countries/

Yes it is. "Just what everybody needs, more debt." is the same as saying "Too much debt." Of course it is. What are you trying to start a useless semantic argument. The meaning is simple, too much debt is implied. The numbers you quote would be relevant if we were discussing the Thai banking sector as opposed to Thai people. If you want to be relevant talk about the amount of Thai personal debt that has increased as a result of the tax rebate and if that is high in comparison to other countries at full employment and with an expanding GDP.

dude youre making too much sense - stop it!

[rubl]

Before we get carried away. I was a bit of track as indeed debt to government, private sector and consumers are three different things. Mind you they tend to influence each other.

"In economics, consumer debt is outstanding debt of consumers, as opposed to businesses or governments. In macroeconomic terms, it is debt which is used to fund consumption rather than investment. It includes debts incurred on purchase of goods that are consumable and/or do not appreciate.^[1]

In recent years, an alternative analysis might view consumer debt as a way to increase domestic production, on the grounds that if credit is easily available, the increased demand for consumer goods should cause an increase of overall domestic production. The permanent income hypothesis suggests that consumers take debt to smooth consumption throughout their lives, borrowing to finance expenditures (particularly housing and schooling) earlier in their lives and paying down debt during higher-earning periods."

http://en.wikipedia.org/wiki/Consumer_debt

[chiangmaikelly]

Just what everybody needs, more debt. That's not the same as saying 'too much debt'. Mind you in Thailand Bank credit to private sector in percent of GDP grew from 140% 2000, down to 110% 2006 to 160% 2011.

This site give you the possibility to look and compare http://www.theglobal...pare-countries/

Yes it is. "Just what everybody needs, more debt." is the same as saying "Too much debt." Of course it is. What are you trying to start a useless semantic argument. The meaning is simple, too much debt is implied. The numbers you quote would be relevant if we were discussing the Thai banking sector as opposed to Thai people. If you want to be relevant talk about the amount of Thai personal debt that has increased as a result of the tax rebate and if that is high in comparison to other countries at full employment and with an expanding GDP.

You work for the Thai government or what?

The topic is 'first-car tax rebates expected to hit THB 85 billion. Related to this is the amount of private debt added (1.25m cars ==> THB 90 billion?) and a GDP expanded because of local populist policies. The outlook for export is not rosy, import still growing, rice rotting away. Now that needs some solid, scientifically based economics to explain its sustainability.

I thought you knew.

[rubl]

Just what everybody needs, more debt. That's not the same as saying 'too much debt'. Mind you in Thailand Bank credit to private sector in percent of GDP grew from 140% 2000, down to 110% 2006 to 160% 2011.

This site give you the possibility to look and compare http://www.theglobal...pare-countries/

Yes it is. "Just what everybody needs, more debt." is the same as saying "Too much debt." Of course it is. What are you trying to start a useless semantic argument. The meaning is simple, too much debt is implied. The numbers you quote would be relevant if we were discussing the Thai banking sector as opposed to Thai people. If you want to be relevant talk about the amount of Thai personal debt that has increased as a result of the tax rebate and if that is high in comparison to other countries at full employment and with an expanding GDP.

You work for the Thai government or what?

The topic is 'first-car tax rebates expected to hit THB 85 billion. Related to this is the amount of private debt added (1.25m cars ==> THB 90 billion?) and a GDP expanded because of local populist policies. The outlook for export is not rosy, import still growing, rice rotting away. Now that needs some solid, scientifically based economics to explain its sustainability.

I thought you knew.

The state of the economy or you working for the Government?

Mind you, recent data has really reassured me that everything is rosy and well

"All these moves were seen as part of the six-month government's feng shui renovation in order to strengthen the luck of the administration so Yingluck could last out her term and successfully sail through troubled waters."

[Moruya]

this plan spurred incremental demand and stimulated a local industry and the thai economy in a year when the rest of the world was sucking wind.

it was a revenue neutral short term boost to the economy which worked.

obviously an unpopular failed populist policy of the pt government

Just out of curiosity do you know how much the taxation department makes per car. If it is less than the 100,000 baht tax rebate given to the buyers then it is just another loss making project to keep the punters happy.

The government needs to gain 119,000,000 baht in order just to break even and if they don't and they make a loss would you call that a successful project?

Not sure they teach economics in Hugoslavia. The tax will be paid by the taxpayers - most if which will already have cars. The profits will be taken by the car companies - which are foreign owned.

As for the buyers, if they have been sensible about their income and expenses then no problem. If they haven't or they lose their job then the situation turns right against them. They will own assets that they can't dispose of. I know of some people who did not tell the truth in their loan applications and were aided by the sales staff.

If the position is that 90% of people in the market have bought their car already then next year will see a big drop.

[Moruya]

<b>billd766, on 2012-12-29 13:22:26, said:</b><br />Just out of curiosity do you know how much the taxation department makes per car. If it is less than the 100,000 baht tax rebate given to the buyers then it is just another loss making project to keep the punters happy.<br />The government needs to gain 119,000,000 baht in order just to break even and if they don't and they make a loss would you call that a successful project?<br />

<br />all ive read says the plan is revenue neutral<br /><br /><br />even the nation says so, so <br /><br />are you saying it aint revenue neutral<br /><br />then prove it<br /><br />uh, ... please<br /><br />and when you finish with that then explain why it has to be revenue neutral to be a successful project<br /><br />lots of important successful things governments do arent revenue neutral

How on Earth can pay, pay, pay be revenue neutral?

How on Earth can money paid by the bank to the car company inject funds into the local economy?

[smileplur]

<b>billd766, on 2012-12-29 13:22:26, said:</b><br />Just out of curiosity do you know how much the taxation department makes per car. If it is less than the 100,000 baht tax rebate given to the buyers then it is just another loss making project to keep the punters happy.<br />The government needs to gain 119,000,000 baht in order just to break even and if they don't and they make a loss would you call that a successful project?<br />

<br />all ive read says the plan is revenue neutral<br /><br /><br />even the nation says so, so <br /><br />are you saying it aint revenue neutral<br /><br />then prove it<br /><br />uh, ... please<br /><br />and when you finish with that then explain why it has to be revenue neutral to be a successful project<br /><br />lots of important successful things governments do arent revenue neutral

How on Earth can pay, pay, pay be revenue neutral?

How on Earth can money paid by the bank to the car company inject funds into the local economy?

Are you kidding? How do you think car manufacturing plants in Thailand pay their employees? What do those employees do with their salaries?

[joeyswags]

this plan spurred incremental demand and stimulated a local industry and the thai economy in a year when the rest of the world was sucking wind.

it was a revenue neutral short term boost to the economy which worked.

obviously an unpopular failed populist policy of the pt government

Just out of curiosity do you know how much the taxation department makes per car. If it is less than the 100,000 baht tax rebate given to the buyers then it is just another loss making project to keep the punters happy.

100,000 bt is the max refund. It varies with the model of car. I believe my wife will receive 86,000 baht.

When renewing my insurance last week I was told that my car (in ex wife's name) qualifies for this. Can you please tell me how your wife applied for this? My ex is upcountry and the deadline is on Monday...wish me luck.

[smileplur]

this plan spurred incremental demand and stimulated a local industry and the thai economy in a year when the rest of the world was sucking wind.

it was a revenue neutral short term boost to the economy which worked.

obviously an unpopular failed populist policy of the pt government

Just out of curiosity do you know how much the taxation department makes per car. If it is less than the 100,000 baht tax rebate given to the buyers then it is just another loss making project to keep the punters happy.

100,000 bt is the max refund. It varies with the model of car. I believe my wife will receive 86,000 baht.

When renewing my insurance last week I was told that my car (in ex wife's name) qualifies for this. Can you please tell me how your wife applied for this? My ex is upcountry and the deadline is on Monday...wish me luck.

Your ex needs to take the required documents to the Excise Tax Department. She fills out an application form which can be downloaded from their website and filled in ahead of time. We had some paperwork from the dealer regarding the car with receipts and stuff. I think a copy of her Tabian Ban and ID Card as well. It was all relly easy and took less than 15 minutes in the office here in Bangkok. Hell, they even gave me some chocolate. Have your ex read about the documetns and find the office she needs to go to: https://firstcar.excise.go.th/

[Moruya]

<b>billd766, on 2012-12-29 13:22:26, said:</b><br />Just out of curiosity do you know how much the taxation department makes per car. If it is less than the 100,000 baht tax rebate given to the buyers then it is just another loss making project to keep the punters happy.<br />The government needs to gain 119,000,000 baht in order just to break even and if they don't and they make a loss would you call that a successful project?<br />

<br />all ive read says the plan is revenue neutral<br /><br /><br />even the nation says so, so <br /><br />are you saying it aint revenue neutral<br /><br />then prove it<br /><br />uh, ... please<br /><br />and when you finish with that then explain why it has to be revenue neutral to be a successful project<br /><br />lots of important successful things governments do arent revenue neutral

How on Earth can pay, pay, pay be revenue neutral?

How on Earth can money paid by the bank to the car company inject funds into the local economy?

Are you kidding? How do you think car manufacturing plants in Thailand pay their employees? What do those employees do with their salaries?

You're possibly making a number of assumptions.

The car industry is very automated and hence not particularly labour intensive.

The Thai car manufacturing industry makes cars for many Asian countries. Whilst the new car figure in Thailand is high, it did not result in that sharp an increase in overall production nor that many heads hired.

[chiangmaikelly]

You're possibly making a number of assumptions.

The car industry is very automated and hence not particularly labour intensive.

The Thai car manufacturing industry makes cars for many Asian countries. Whilst the new car figure in Thailand is high, it did not result in that sharp an increase in overall production nor that many heads hired.

For every one major auto plant there are 1000 little factories producing parts for the big plant. It is not just Ford it is a thousand Thai mom and pop operations producing things for Ford. The numbers are listed. You can look them up.

So no you are not correct. Some things are automated but many are not. There is also a giant parts industry and tire industry and oil and gas industry to go along with the auto industry. Take a trip to the industrial East Coast of Thailand.

[thomash]

Oh great more cars on the road that people cannot really afford, no wonder the traffic in Bangkok has gotten worse! Too bad they did not put the money into the mass transit which would've had long term benefit for everyone along with less cars on the road contributing to the pollution and traffic. But I guess that would've made too much sense!

[chiangmaikelly]

Oh great more cars on the road that people cannot really afford, no wonder the traffic in Bangkok has gotten worse! Too bad they did not put the money into the mass transit which would've had long term benefit for everyone along with less cars on the road contributing to the pollution and traffic. But I guess that would've made too much sense!

Not too much sense too little money. Henry Ford was a success not because his cars were great but because his workers could afford to buy his cars (a first).

[noob7]

'the department had collected excise tax from the carmakers at point of sale"

And who will get the 2.9% for the 1year fixed deposits?

[metisdead]

Off topic posts and replies have been removed.

[MESmith]

Oh great more cars on the road that people cannot really afford, no wonder the traffic in Bangkok has gotten worse! Too bad they did not put the money into the mass transit which would've had long term benefit for everyone along with less cars on the road contributing to the pollution and traffic. But I guess that would've made too much sense!

There's more to Thailand than Bangkok

[Thai at Heart]

Just what everybody needs, more debt. That's not the same as saying 'too much debt'. Mind you in Thailand Bank credit to private sector in percent of GDP grew from 140% 2000, down to 110% 2006 to 160% 2011.

This site give you the possibility to look and compare http://www.theglobal...pare-countries/

Yes it is. "Just what everybody needs, more debt." is the same as saying "Too much debt." Of course it is. What are you trying to start a useless semantic argument. The meaning is simple, too much debt is implied. The numbers you quote would be relevant if we were discussing the Thai banking sector as opposed to Thai people. If you want to be relevant talk about the amount of Thai personal debt that has increased as a result of the tax rebate and if that is high in comparison to other countries at full employment and with an expanding GDP.

You work for the Thai government or what?

The topic is 'first-car tax rebates expected to hit THB 85 billion. Related to this is the amount of private debt added (1.25m cars ==> THB 90 billion?) and a GDP expanded because of local populist policies. The outlook for export is not rosy, import still growing, rice rotting away. Now that needs some solid, scientifically based economics to explain its sustainability.

I thought you knew.

Basically the government has borrowed for one year from the people. Interesting tactic. If the policy funds itself, i.e. zero sum, they have moved consumption up a year, with the actually financing their own repayment.

It will decimate used car values though.

At least the government gets the vat though.

I actually await an increase in vat. It's effect won't be the same as in the west because the size of the cash economy here is so big. It would fall far more on the rich than the poor.

Edited December 29, 2012 by Thai at Heart

[aussiebebe]

Thai debt-collection companies are prediction that at least 20% of buyers will default before the first year, thus receiving no rebate - the official figures don't reflect this. I'm curious to know what this is doing to used car values and sales. I just glanced at Toyota Sure, the certified used car website, and a 2008 Toyota Vios E with 120,000km on the clock is priced at 480,000baht! Who is their right mind will ever buy this car when they could get a brand new Nissan Almera with 3 years warranty and save 1/3 on fuel? It's like you're going to get this 'lost generation' of used cars that will never be sold.

[chiangmaikelly]

Thai debt-collection companies are prediction that at least 20% of buyers will default before the first year, thus receiving no rebate - the official figures don't reflect this. I'm curious to know what this is doing to used car values and sales. I just glanced at Toyota Sure, the certified used car website, and a 2008 Toyota Vios E with 120,000km on the clock is priced at 480,000baht! Who is their right mind will ever buy this car when they could get a brand new Nissan Almera with 3 years warranty and save 1/3 on fuel? It's like you're going to get this 'lost generation' of used cars that will never be sold.

What Thai debt collection companies?

[timewilltell]

Thai debt-collection companies are prediction that at least 20% of buyers will default before the first year, thus receiving no rebate - the official figures don't reflect this. I'm curious to know what this is doing to used car values and sales. I just glanced at Toyota Sure, the certified used car website, and a 2008 Toyota Vios E with 120,000km on the clock is priced at 480,000baht! Who is their right mind will ever buy this car when they could get a brand new Nissan Almera with 3 years warranty and save 1/3 on fuel? It's like you're going to get this 'lost generation' of used cars that will never be sold.

No the dealers will just keep putting the prices up I suppose!

[Thai at Heart]

Thai debt-collection companies are prediction that at least 20% of buyers will default before the first year, thus receiving no rebate - the official figures don't reflect this. I'm curious to know what this is doing to used car values and sales. I just glanced at Toyota Sure, the certified used car website, and a 2008 Toyota Vios E with 120,000km on the clock is priced at 480,000baht! Who is their right mind will ever buy this car when they could get a brand new Nissan Almera with 3 years warranty and save 1/3 on fuel? It's like you're going to get this 'lost generation' of used cars that will never be sold.

Toyota Sure is one thing, but the road side dealers will take a hammering on this. That said, used car dealers in Thailand are just laundering cash hence the high prices offered.

[isawasnake]

I am happy about this program because it has necessarily taken people off the BTS, and put them into a totally useless car on the "roads" in Bangkok. I haven't actually noticed a difference, but it could not hurt, that is for sure. I love it when people clog themselves in traffic, the more the better.

[reader]

All this does it to add to the burden of credit people already have, We have seen a recent hike in wages to 300 baht per day which I assume is to pay for all these type of loans. Naturally of course the price is that inflation in Thailand will sky-rocket out of proportions which we are seeing now. Of course this cannot continue forever and eventually the economy will pay the price for letting people go into uneccessary debt. The other consideration Thailand is no longer a cheap place to live and subsequently you will see a drop in tourists coming since they will certainly vote with their pocket and look for other countries which are certainly cheaper. This isn't the smartest move the government has made and there is always a price to pay in the long term.

[Thai at Heart]

All this does it to add to the burden of credit people already have, We have seen a recent hike in wages to 300 baht per day which I assume is to pay for all these type of loans. Naturally of course the price is that inflation in Thailand will sky-rocket out of proportions which we are seeing now. Of course this cannot continue forever and eventually the economy will pay the price for letting people go into uneccessary debt. The other consideration Thailand is no longer a cheap place to live and subsequently you will see a drop in tourists coming since they will certainly vote with their pocket and look for other countries which are certainly cheaper. This isn't the smartest move the government has made and there is always a price to pay in the long term.

The finance companies will end up holding the baby, not the people or the government.

If toyota, Honda or nissan finance want to lend that is their issue. Borrow in japan at zero, presumably it seems like a good deal.

Edited December 29, 2012 by Thai at Heart

[kimamey]

And the majority of Thais will be selling their car after they get the rebate and then using the rebate to finance a new car. So this plan probably was a good kick for the economy or at least car and petrol sales. Fageddabout the pollution boost.

youre just whiinin in order to whine

the owner has to keep the car and cant sell it right away

pollution boost? come on. thats lame.

You're right the car can't be sold for 5 years although I've no idea if there's a way round this. This was supposed to be for first time buyers but as far as I know a lot have been bought in other people's names.

If you increase the sales of cars then there's obviously going to be an increase in the amount of pollution and traffic although I doubt that it will be significant. The UK government did a similar thing but it involved the scrapping of a vehicle over ten years old to qualify so there was no increase in vehicles. The problem now is the short term boost has gone and sales are down again which may happen here as well. There may well be a drop in sales in 5 years time when all the 5 year old cars are sold. We'll just have to wait and see.

There's something I don't understand about these 2 statements.

'He added that these rebates would not affect the government budget because the department had collected excise tax from the carmakers at point of sale.

The gradual payment of the rebates through 2014 would also ease the blow to the public purse.'

If the rebates don't effect the government budget as the department had collected excise tax from the car makers then how can the gradual payment of the rebates through 2014 ease the blow to the public purse. According to the first statement there isn't any blow to ease.

Although I think this may have been one of the few if not the only good policiy of this government, statements like those above make me wonder if they know what they're doing.

Still we'll see what happens.

[chiangmaikelly]

All this does it to add to the burden of credit people already have, We have seen a recent hike in wages to 300 baht per day which I assume is to pay for all these type of loans. Naturally of course the price is that inflation in Thailand will sky-rocket out of proportions which we are seeing now. Of course this cannot continue forever and eventually the economy will pay the price for letting people go into uneccessary debt. The other consideration Thailand is no longer a cheap place to live and subsequently you will see a drop in tourists coming since they will certainly vote with their pocket and look for other countries which are certainly cheaper. This isn't the smartest move the government has made and there is always a price to pay in the long term.

Well my dear Sir what is the rate of inflation in Thailand? How much was the average wage that got raised to 300 baht? What percent of debt is in your expert opinion unnecessary? What is the percent of Thai personal debt now before the tax rebate? What percent of Thais will get the rebate?