Thailand will remove the 8% excise tax imposed on batteries
Thailand’s Excise Department is looking to cut taxes on electric vehicle batteries in a move to support domestic production and to encourage EV battery plants opening up across the country, a source familiar with the issue told the Bangkok Post.
Automakers that are producing plug-in hybrids and electrics and submitted applications by the end of 2018 will be offered tax incentives, which may see it become a production hub for environmentally friendly vehicles.
At the start of March 2019, the cabinet approved the cutting of the excise tax for full EVs from January 1, 2020 to December 31, 2022, in hopes of speeding up manufacturing and to reduce emissions.
Included in the deal is the slashing of the 8% excise tax imposed on batteries; however the overall tax cut cannot be estimated as it depends on production costs and processes, according to the source.
The waiver will only be offered to projects from 13 EV manufacturers that won promotional privileges from the Board of Investment (BoI) to introduce EV launches from three years after being granted the tax privilege.
The authority’s incentive has attracted Japanese carmakers such as Toyota and Honda to seek out EV production opportunities to further expand their presence in Southeast Asian markets.
Automakers have three years following governmental approval of plans to consider what models to make, and are free to make changes to production volumes and dates.
Although demand is rising, EVs have a share of just 2% in Thailand, which is considered one of the region’s more advanced markets.
The incentive to boost EV industry is part of the government’s plan to revamp 12 industries.