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Saturday, August 20, 2022
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FTI to hold discussions on EV excise Tax Cut

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The Federation of Thai Industries (FTI) plans to meet with the Ministry of Finance to discuss implementing a tariff reduction for electric vehicles (EVs). These discussions are intended to address concerns that such a measure would benefit Chinese EVs disproportionately.

FTI President Kriengkrai Thiennukul made the announcement after federation members complained that the ASEAN-China free trade agreement would eliminate all tariffs on Chinese EVs. They pointed out that under the tariff reduction regulation, other countries’ EV taxes would remain high at 40%.

The Thai government previously approved a motion by the Ministry of Finance to lower import duties on fully built battery electric vehicle (BEV) units (CBU).

Under the approved measures, battery electric vehicles with a retail price of up to 2 million baht will enjoy a reduced import duty of 40 percent, down from 80 percent.

For BEVs with a retail price between 2 million and 7 million baht, the import duty is reduced from 80% to 60%. This reduction is only for CBU units and is expected to cost the government about 60 billion baht in revenue.

Mr. Kriengkrai said the discussions between the FTI and the Ministry of Finance should pave the way for a restructuring of the EV tax that would benefit all parties.

The adjusted regulations could also help maintain EV manufacturing bases in the ASEAN bloc. Kriengkrai warned that uneven tariffs for imported EVs would likely discourage investors from producing EVs locally, further complicating efforts to elevate Thailand as an ASEAN EV manufacturing hub.

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