Bangkok:The Cabinet has approved a substantial increase in import taxes on electric vehicles (EVs), raising the rate to 35% in a strategic move to bolster Thailand's domestic automotive industry and encourage further investment in EV production.
According to Thai News Agency, the decision was announced by Dr. Ekniti Nitithanprapas, Deputy Prime Minister and Minister of Finance, following an official Cabinet meeting held in Udon Thani Province. The new tax rate, effective from January 1, 2027, represents a significant increase from the current 10% for Battery Electric Vehicles (BEVs) and 15% for Recycled Electric Vehicles (REEVs).
The restructuring of the excise tax aligns with resolutions from the National Electric Vehicle Policy Committee meetings, which emphasized the need to incentivize investment in the domestic manufacturing and assembly of automotive components. By adjusting the tax structure, the government aims to maintain the stability of Thailand's automotive industry amidst rising competition from imported vehicles not participating in government incentive programs.
Dr. Ekniti highlighted the three key principles behind the tax restructuring promoting investment-driven imports, establishing Thailand as a regional and global EV hub, and enhancing the use of high-value-added domestic components. These measures are expected to strengthen the production chain, create jobs, and upgrade labor skills, ultimately transforming Thailand into a hub for the production and export of environmentally friendly vehicles.
The new tax policy is part of a broader government initiative to develop new growth engines by expanding existing industries efficiently and sustainably. It seeks to ensure fair competition for domestically produced vehicles and benefit domestic automobile and parts manufacturers through increased production, employment, and supply chain enhancements.