First-Car Tax Rebates Expected To Hit Bt85B: Thailand

[kimamey]

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?

all ive read says the plan is revenue neutral

even the nation says so, so

are you saying it aint revenue neutral

then prove it

uh, ... please

and when you finish with that then explain why it has to be revenue neutral to be a successful project

lots of important successful things governments do arent revenue neutral

I was never under the impression that this was revenue neutral and in fact I think there was an estimate for how much it would cost which of course was way out due to the high take up of the scheme. Most of these stimulus packages cost money in other countries. If this wasn't the case they could do this indefinitely. This is just a type of Keynesian policy that is used to keep an economy from going into recession.

In my last post I've mentioned the contradictory statements regarding the cost or lack of.

Edited December 29, 2012 by kimamey

[Thai at Heart]

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?

all ive read says the plan is revenue neutral

even the nation says so, so

are you saying it aint revenue neutral

then prove it

uh, ... please

and when you finish with that then explain why it has to be revenue neutral to be a successful project

lots of important successful things governments do arent revenue neutral

I was never under the impression that this was revenue neutral and in fact I think there was an estimate for how much it would cost which of course was way out due to the high take up of the scheme. Most of these stimulus packages cost money in other countries. If this wasn't the case they could do this indefinitely. This is just a type of Keynesian policy that is used to keep an economy from going into recession.

In my last post I've mentioned the contradictory statements regarding the cost or lack of.

The government returns the excise, revenue neutral, plus they get the vat and the vat charged on the finance.

They have basically securitized the excise revenue on cars and passed the risk to the finance companies.

If people don't pay, toyota finance (or other) are on the hook.

Edited December 29, 2012 by Thai at Heart

[kimamey]

They will pay it back over a period of 5 years, maximum 20 000 per year. If you sell the car, payments will stop.

Not quite. It is not spread out. It is paid out after a year of ownership as stated previously in this thread.

That's not the information I got from the Toyota dealer we bought a Vios from. I'll trust that information before I'll get another verifiable source.

It's after one year it even says so in the OP.

[Thai at Heart]

They will pay it back over a period of 5 years, maximum 20 000 per year. If you sell the car, payments will stop.

Not quite. It is not spread out. It is paid out after a year of ownership as stated previously in this thread.

That's not the information I got from the Toyota dealer we bought a Vios from. I'll trust that information before I'll get another verifiable source.

It's after one year it even says so in the OP.

So expect a massive surge in sales of second hand cars after one year. There is no way the government is going to take 500k new car owners to court to get the rebate back.

[Nisa]

Cannot sell within 5 years as they won't let you change the name in the Tabien Rot. However, pay 7000b a month, nothing down, 100,000b rebate after you've paid 84,000b then stop paying the bank. Bank repossesses car you've driven for a year, you made 16,000b, the bank is screwed.

The extremes folks will take to try to feed their doom and gloom and faux superiority attitudes??? Lol, a person whose credit and income allows them to buy a car with no money down and can afford 7,000 a month (an unrealistic number used to help the doom and gloom view) is going to destroy their credit all for 16k baht as well as do something that is just dishonest.

"as well as do something that is just dishonest."

I was agreeing with you up until that point. I have seen too many examples to suggest that some people would try that plan just for a few of thousand baht.

Yea people with good credit and decent incomes are likely to focus on how to go out to do scams like this that somebody have to be a bit mentally off to believe even make sense or would be the least bit profitable. Some folks are so quick to come up with idiotic conspiracy theories that they don't give one thought to such things as car depreciation (the second driven off the lot) or interest charges. Car companies have offered rebates for a long long long time and .... forget it, not even worth it if people are bound and determined to believe so many others are miserable and as dishonest as they are.

[Thai at Heart]

Cannot sell within 5 years as they won't let you change the name in the Tabien Rot. However, pay 7000b a month, nothing down, 100,000b rebate after you've paid 84,000b then stop paying the bank. Bank repossesses car you've driven for a year, you made 16,000b, the bank is screwed.

The extremes folks will take to try to feed their doom and gloom and faux superiority attitudes??? Lol, a person whose credit and income allows them to buy a car with no money down and can afford 7,000 a month (an unrealistic number used to help the doom and gloom view) is going to destroy their credit all for 16k baht as well as do something that is just dishonest.

"as well as do something that is just dishonest."

I was agreeing with you up until that point. I have seen too many examples to suggest that some people would try that plan just for a few of thousand baht.

Yea people with good credit and decent incomes are likely to focus on how to go out to do scams like this that somebody have to be a bit mentally off to believe even make sense or would be the least bit profitable. Some folks are so quick to come up with idiotic conspiracy theories that they don't give one thought to such things as car depreciation (the second driven off the lot) or interest charges. Car companies have offered rebates for a long long long time and .... forget it, not even worth it if people are bound and determined to believe so many others are miserable and as dishonest as they are.

If 20 percent default, the car will be sold and the finance companies are on the hook anyway. Maybe Thailand will export 200k nearly new, vios, brio and march to Singapore.

[DrFloyd]

Populism incarnated .

[kimamey]

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?

all ive read says the plan is revenue neutral

even the nation says so, so

are you saying it aint revenue neutral

then prove it

uh, ... please

and when you finish with that then explain why it has to be revenue neutral to be a successful project

lots of important successful things governments do arent revenue neutral

These 2 links suggest there is a cost to this scheme.Not that that's unusual for these policies. These costs are in the form of lost revenue but would still mean it's not revenue neutral.

http://www.thaivisa.com/forum/topic/588367-tax-rebates-begin-under-first-car-scheme-thailand/

http://www.thaivisa.com/forum/topic/498011-first-car-scheme-gets-the-green-light-by-thai-cabinet/

There's still the issue of the contradictory statements in the OP that I mentioned earlier.

'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'.

[Briggsy]

If I understand the scheme correctly a first-time car buyer who buys a Thai made car with a price no more than up to one million needs to keep the car for five years but after one year already gets the tax rebate of 100,000. This 100,000 is also the maximum refunded.

If this is correct that would mean with 1.25 million new cars, a maximum of 125 billion is rebated. As the excise tax is collected at point of sale (upon delivery?) the Excise Department will probably make a reservation from that which would explain why there is no separate government budget required.

By the book, the excise tax is calculated upon the the car leaving the factory. I am sure in reality it is collected on showroom sales. So I reckon from an accounting point of view, you are right.

[Moruya]

The government returns the excise, revenue neutral, plus they get the vat and the vat charged on the finance.

They have basically securitized the excise revenue on cars and passed the risk to the finance companies.

If people don't pay, toyota finance (or other) are on the hook.

That's a rubbish statement.

How can earning 120B one minute and earning zero the next be the same?

Wish I was negotiating your next salary!

[rubl]

If I understand the scheme correctly a first-time car buyer who buys a Thai made car with a price no more than up to one million needs to keep the car for five years but after one year already gets the tax rebate of 100,000. This 100,000 is also the maximum refunded.

If this is correct that would mean with 1.25 million new cars, a maximum of 125 billion is rebated. As the excise tax is collected at point of sale (upon delivery?) the Excise Department will probably make a reservation from that which would explain why there is no separate government budget required.

By the book, the excise tax is calculated upon the the car leaving the factory. I am sure in reality it is collected on showroom sales. So I reckon from an accounting point of view, you are right.

Thanks Briggs. I must admit higher level of government financing and accounting is mostly a mystery to me. I only know I have to show a signed form and receipt about my taxes here before I can renew my visa and workpermit. One of those things

[ALFREDO]

Cannot sell within 5 years as they won't let you change the name in the Tabien Rot. However, pay 7000b a month, nothing down, 100,000b rebate after you've paid 84,000b then stop paying the bank. Bank repossesses car you've driven for a year, you made 16,000b, the bank is screwed.

You know places.where you can buy a car, without any down payment and security?

[ALFREDO]

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.

All done in one day - yesterday, sold the old car Toyota Pick up, with the help of NISSAN Sawang Den Ding,Sakhon Nakhon,

as I believe 50.000 Baht higher than I saw it in the official stats in a Thai "used car" magazine.

Was a bit tricky, as the old car was in a CASH FOR CAR contract, but all went smoothly!

Came with the old car, drove home with the new car!

I was surprised how easy it was done, I did not get involved,

went to the LOTUS around the corner, for a lunch and some shopping

and drank some free bees soft drinks and coffee, in the nice and friendly NISSAN lounge.

Cars went out in that small but new Nissan outlet similar to an assembly line.

The car GF changed to, was not ordered beforehand. Just was on stock in the right color -frog green?- to.

One of the family qualified for that program, Nissan employer even made a house visit 26 km one way to get the right papers and signature.

Needed nearly a day and went with new car, small MARCH home late afternoon. TIT, sometimes so convenient!

Edited December 29, 2012 by ALFREDO

[rubl]

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.

All done in one day - yesterday, sold the old car Toyota Pick up, with the help of NISSAN Sawang Den Ding,Sakhon Nakhon,

as I believe 50.000 Baht higher than I saw it in the official stats in a Thai "used car" magazine.

Was a bit tricky, as the old car was in a CASH FOR CAR contract, but all went smoothly!

Came with the old car, drove home with the new car!

I was surprised how easy it was done, I did not get involved,

went to the LOTUS around the corner, for a lunch and some shopping

and drank some free bees soft drinks and coffee, in the nice and friendly NISSAN lounge.

Cars went out in that small but new Nissan outlet similar to an assembly line.

The car GF changed to, was not ordered beforehand. Just was on stock in the right color -frog green?- to.

One of the family qualified for that program, Nissan employer even made a house visit 26 km one way to get the right papers and signature.

Needed nearly a day and went with new car, small MARCH home late afternoon home. TIT, sometimes so convenient!

Please excuse me and for sure no offence meant. Would you consider yourself or your GF part of the group targetted for this scheme by the government?

[noob7]

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.

All done in one day - yesterday, sold the old car Toyota Pick up, with the help of NISSAN Sawang Den Ding,Sakhon Nakhon,

as I believe 50.000 Baht higher than I saw it in the official stats in a Thai "used car" magazine.

Was a bit tricky, as the old car was in a CASH FOR CAR contract, but all went smoothly!

Came with the old car, drove home with the new car!

I was surprised how easy it was done, I did not get involved,

went to the LOTUS around the corner, for a lunch and some shopping

and drank some free bees soft drinks and coffee, in the nice and friendly NISSAN lounge.

Cars went out in that small but new Nissan outlet similar to an assembly line.

The car GF changed to, was not ordered beforehand. Just was on stock in the right color -frog green?- to.

One of the family qualified for that program, Nissan employer even made a house visit 26 km one way to get the right papers and signature.

Needed nearly a day and went with new car, small MARCH home late afternoon home. TIT, sometimes so convenient!

Please excuse me and for sure no offence meant. Would you consider yourself or your GF part of the group targetted for this scheme by the government?

Himself? Of course not! He can't vote for red!

His Gf maybe.

In case she isn't from of a family, that doesn't need pickups an is buying for some time already corollas (p.ex) with minimum 1600cc, on their own.

The targets are mostly in/from the north east, methinks!

[ALFREDO]

went to the LOTUS for a lunch and some shopping.

Please excuse me and for sure no offence meant. Would you consider yourself or your GF part of the group targetted for this scheme by the government?

I do not know what you mean. I had nothing to do with that "deal".

The GF bought 5-6 years ago a car, made the down payment and paid the first years leasing in advance.

I paid after the first year all monthly installments, car was fully paid.

GF had debts went with the car to a loan shark, I helped her to bring it to CASH FOR CAR.

Now GF decides to use this scheme to change to a new smaller car,

get her hand same time on some cash money and profit from the Tax policy of the ruling party.(Gets 63.000.- Baht in one year paid.)

30 % down payment, 6 year contract and she walked out yesterday with 143.000.- Baht cash, + 63.000 in a year.

Pays now less than to Cash for car has a smaller but new car. Looks much better for a woman anyway!

She did never drive herself (no driver license also) that much to Powerful Pick up.

Good possibility, she starts now driving with that more suitable car for her,

So -rubl- where I am involved?

Edited December 29, 2012 by ALFREDO

[Thai at Heart]

The government returns the excise, revenue neutral, plus they get the vat and the vat charged on the finance.

They have basically securitized the excise revenue on cars and passed the risk to the finance companies.

If people don't pay, toyota finance (or other) are on the hook.

That's a rubbish statement.

How can earning 120B one minute and earning zero the next be the same?

Wish I was negotiating your next salary!

Well, who's risk is this deal if someone doesn't pay from minute one?

Government doesn't pay back the rebate, someone loses a car. Finance company has a car to sell.

Government has the excise and vat.......

And before you make blanket accusations, consider who's risk is who's in this deal....

[rubl]

went to the LOTUS for a lunch and some shopping.

Please excuse me and for sure no offence meant. Would you consider yourself or your GF part of the group targetted for this scheme by the government?

I do not know what you mean. I had nothing to do with that "deal".

The GF bought 5-6 years ago a car, made the down payment and paid the first years leasing in advance.

I paid after the first year all monthly installments, car was fully paid.

GF had debts went with the car to a loan shark, I helped her to bring it to CASH FOR CAR.

Now GF decides to use this scheme to change to a new smaller car,

get her hand same time on some cash money and profit from the Tax policy of the ruling party.(Gets 63.000.- Baht in one year paid.)

30 % down payment, 6 year contract and she walked out yesterday with 143.000.- Baht cash, + 63.000 in a year.

Pays now less than to Cash for car has a smaller but new car. Looks much better for a woman anyway!

She did never drive herself (no driver license also) that much to Powerful Pick up.

Good possibility, she starts now driving with that much more suitable car for her,

So -rubl- where I am involved?

My excuses, I may have phrased my question too vague or even incorrectly. For sure I wasn't targetting you or even your GF.

I'm just wondering about this government scheme which in their list of 'to be implemented in the first year' was

"1.8.4 Introduce tax measures to reduce the general public's burden of purchasing such essentials as the first house and car."

[ALFREDO]

[

My excuses, I may have phrased my question too vague or even incorrectly. For sure I wasn't targetting you or even your GF.

I'm just wondering about this government scheme which in their list of 'to be implemented in the first year' was

"1.8.4 Introduce tax measures to reduce the general public's burden of purchasing such essentials as the first house and car."

-rubl-

You are on the right path, but that is, same so many other policies of the leading a kind of -confidence trick- to keep the loyal voters happy

and please new voters.

I am sure, only a few of these a Million+ new car buyers pay these cars themselves!

Good part, most part I think are, only front men and women! (stalking horses)

Who cares, that is only the same policy, keep the "right-red?" electorate happy.

[Thai at Heart]

[

My excuses, I may have phrased my question too vague or even incorrectly. For sure I wasn't targetting you or even your GF.

I'm just wondering about this government scheme which in their list of 'to be implemented in the first year' was

"1.8.4 Introduce tax measures to reduce the general public's burden of purchasing such essentials as the first house and car."

-rubl-

You are on the right path, but that is, same so many other policies of the leading a kind of -confidence trick- to keep the loyal voters happy

and please new voters.

I am sure, only a few of these a Million+ new car buyers pay these cars themselves!

Good part, most part I think are, only front men and women! (stalking horses)

Who cares, that is only the same policy, keep the "right-red?" electorate happy.

Its even cleverer than that. Assuming most of the buyers are paying interest, essentially, they have advanced the government a shed load of cash, on which the buyers are paying the interest. This is better than war bonds. They will have 20%, who will default anyway, so no rebate, collect all the vat and pay back later.

A truly win win from the govt perspective. They have basically monetized the risk to Toyota, Honda (Japanese bonds) risk. Expect other countries to follow suit soon.

[isawasnake]

I don't know if it has been mentioned, but things are so expensive here. It seems like part of what they have done is essentially just offer the cars up for nearer to what they should actually cost (ie cost in other countries) when the "rebate" is included. In short, they are giving you something at the correct price for once, and acting like they are doing the buyers some big favor, yet it is all based on a system that overcharges in the first place.

[beautifulthailand99]

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

Debt is money and a forward labour promisary - if youve got to pay it back youve gotta work and work = economic activity = prosperity give or take a baht or two !