Bangkok: The Electric Vehicle Policy Committee has approved a new three-tiered tax structure aimed at promoting domestic investment and production of electric vehicles in Thailand. The restructuring of excise taxes was a key agenda item during the committee's first meeting, chaired by Deputy Prime Minister and Minister of Finance, Mr. Ekniti Nitithanprapas, and is designed to enhance Thailand's position as a leading vehicle manufacturing hub for export.
According to Thai News Agency, the meeting was attended by Mr. Narut Teodsathirasak, Secretary-General of the Board of Investment (BOI), and Mr. Pornchai Theeravech, Director-General of the Excise Department. They announced the results of the National Electric Vehicle Policy Committee's meeting in 2026, highlighting the tax restructuring initiative as a step to stabilize Thailand's production base in the competitive automotive industry. The discussion acknowledged significant progress in the EV sector, noting an increase in consumer acceptance and a rise in electric vehicle registrations from 0.3 percent to nearly 30 percent over five years.
Mr. Narut emphasized that Thailand has become ASEAN's largest EV production base and is among the world's leading countries in this sector. Japanese automakers, such as Mitsubishi Motors, Isuzu, Honda, and Mazda, have committed to investing over 50 billion baht in Thailand by 2029-2030, underscoring confidence in the country's automotive manufacturing potential. Moving forward, the focus will shift to managing used batteries and end-of-life vehicles.
Two subcommittees were established to support these initiatives: one on promoting EV production, chaired by the Minister of Industry, and another on developing charging station networks, chaired by the Minister of Energy. These subcommittees will address supply chain issues, standards for used battery management, and promote commercial electric vehicles like buses, trucks, and motorcycles.
The Director-General of the Excise Department explained that the new tax structure will have three tiers. Businesses investing and manufacturing domestically with a suitable proportion of local parts will benefit from lower tax rates. In contrast, those importing vehicles for market testing or without domestic production plans will face higher tax rates. The Ministry of Finance and the Excise Department will refine these details with the private sector before submitting them to the Cabinet, aiming for implementation by September.
The current tax rate for imported cars is around 10 percent, while domestically produced cars are taxed at approximately 2 percent, with some categories at 8 percent. The new rates will be reviewed in detail, focusing on components that impact vehicle functionality rather than superficial costs.
The private sector suggested revising the Local Content calculation formula for Free Zones, a proposal the Ministry of Industry and the Customs Department will evaluate. The BOI Secretary-General noted the government's intent to upgrade from Local Content to 'Thai Content,' involving parts made by Thai companies. This shift could mean additional incentives for local production. The private sector supported the three-tier tax adjustment, and the Excise Department will draft the tax rates and laws, starting with imported vehicles to curb excessive imports, and expedite the proposal for Cabinet approval.