Thailand has just begun to push for additional electric vehicles on the road, in line with other countries across the world. From 2035 onwards, the country has set a lofty aim of only selling zero-emission vehicles. With it followed a flurry of government incentives for the Thai EV sector. Officials just proposed tax incentives to encourage the use of clean automobiles this week.
Thailand’s main goal is to transition from being a Southeast Asian center for the manufacture of conventional automobiles to one that produces electric vehicles. The automotive sector is already one of Thailand’s most important industries. It supports sectors ranging from steel and iron to petrochemicals and plastic and accounts for around 10% of the GDP. It employs 850,000 people.
Since the nation has set a deadline for the phase-out of combustion-engine vehicles, observers expect the government to take steps to ease the transition. Typically, this entails providing tax incentives, constructing the necessary infrastructure, and drafting rules to encourage the production of electric vehicles. Incentivizing consumers to purchase such vehicles would also be a healthy incentive.
However, Thailand’s cabinet authorized tax incentives to encourage the use of electric vehicles while also attracting “high potential” foreigners to assist strengthen the economy. According to Reuters, the car tax measures include a 40 percent reduction in import duty on totally manufactured EVs priced up to $61,805 (2 million baht) this year and next.
Import duty would be cut by 20% for electric vehicles valued between 2 million to 7 million baht. There is also a decrease in excise tax, which will be reduced from 8% to 2% for imported EVs. According to Finance Minister Arkhom Termpittayapaisith, this is projected to add 7,000 electric vehicles in the first year.
The cabinet also approved a steep reduction in income tax rates for talented foreign experts working in specific industries or economic zones, from 35 percent to 17 percent. Subsidies ranging from 70,000 to 150,000 baht for each electric vehicle and 18,000 baht for the electric motorcycles will be offered to approved automotive makers.
It will “promote investment and employment,” according to the finance minister. It’s vital; otherwise, automobile makers and others will be able to stay up with us,” Arkhom noted. The Thai government authorized 3 billion baht ($98.7 million) from the state treasury in financial 2022 to pay the subsidy programs under this EV scheme. It also agreed on a deal to give a budget of 40 billion baht ($1.35 billion) to encourage the use of electric vehicles between fiscal years 2023 and 2025.