Thailand
Thailand: Automaker tax aid seen as ‘win-win’
Patchara Anuntasilpa, head of the Excise Department, hinted he personally supports automakers’ tax cut proposal to boost domestic demand, saying it could be a win-win for all.
Against the backdrop of a reeling economy, consumers will not purchase new cars if prices are not reduced, which hurts excise revenue, he said.
“New assembled cars sitting idle will depreciate, so cutting the price helps consumers and manufacturers. Automakers can sell their stock to generate cash flow, while the government earns tax income, albeit a smaller amount, and consumers have cheaper options,” said Mr Patchara.
The Federation of Thai Industries’ (FTI) automotive club proposed three assistance measures comprising a 50% excise tax reduction until the end of this year, a car trade-in scheme in return for 100,000 baht paid by the state, and a delay in enforcement of Euro 5 emission standards.
According to FTI data, car production slid 83.6% from a year earlier and 83.2% from the preceding month to 24,711 units in April. For the first four months of the year, Thailand had total auto capacity of 478,393 units, a 32.8% year-on-year decrease.
He said any tax cut needs approval from Finance Minister Uttama Savanayana before forwarding to the cabinet.
Excise taxes on cars contribute around 100 billion baht a year to the department. Assembled cars are not subject to an excise tax until they leave assembly plants or tax-free zones.
Mr Patchara said the Finance Ministry’s mandate is to rebate the excise tax already paid for cars parked in showrooms.
For the other two FTI proposals, he said they depend on the Industry Ministry’s decision.
Mr Uttama said the Finance Ministry is planning to roll out a job creation scheme for low-income earners after the pandemic’s spread is contained.
The job creation scheme is aimed at boosting income to those who are at the lower end of the income ladder and will follow the aid money given to informal workers, he said.
Source: https://www.bangkokpost.com/business/1924132/automaker-tax-aid-seen-as-win-win