Electric vehicle makers that receive an excise tax waiver are required to set up local EV battery plants within five years, says a senior official at the Excise Department.
If they fail to comply with the requirement, they are subject to fines and interest as stipulated by the government, said Nutthakorn Utensute, director of the Tax Planning Bureau.
The cabinet approved eliminating the excise tax for full EVs from Jan 1, 2020 to Dec 31, 2022 to speed up manufacturing and reduce emissions. Some 13 EV makers won promotional privileges from the Board of Investment (BoI), and the tax manoeuvre is meant to accelerate their production launches from three years after being granted the tax privilege.
The excise tax for promoted full EV projects is 2%. Investment projects that did not win BoI incentives are subject to an excise tax of 8% for full EVs.
EVs are one of the government's 12 targeted industries identified as new engines of economic growth under the S-curve policy.
The excise tax exemption for full EVs is estimated to cost the government 1 billion baht in forgone tax revenue a year, Mr Nutthakorn said, and the measure will reduce the price of full EVs by 20,000 baht for every 1 million baht.
He said the Excise Department will mull establishing a fund charging a battery usage fee to finance management of used batteries.
Three brands have already done locally made EVs. FOMM is selling EVs at 600,000-700,000 baht each, BYD's are priced at about 1 million baht, and Nissan's Leaf has a price tag of 1.9 million baht.
The cabinet has also agreed to trim the excise tax on passenger pickup vehicles that release no more than 0.005 micrometres of particulate matter, as well as on B20-compatible pickups, to 1-2% in an effort to reduce air pollution.
The government wants to adopt the Euro 5 fuel economy standard that requires a maximum of PM0.005, while the current Euro 4 standard allows up to PM0.025 for diesel vehicles.
