Tax cut of 15-20% for eco-cars
The Industry Ministry will propose to the Cabinet that the excise tax on eco-cars be fixed at 15-20 per cent, to encourage investment in small-car production, an automobile industry source said.
Currently, the Finance Ministry levies an excise tax of 30 per cent on conventional cars. The source said the government should grant a special excise tax rate for eco-cars to attract auto-makers to invest in eco-car projects here, given that production costs of eco-cars and other small cars were similar. "Although the government will lose income by cutting the tax, eco-cars will reduce the country's environmental costs and energy usage," he said. He said Industry Minister Kosit Panpiemras will try to push the eco-car project during the remaining period of the interim government. All criteria for eco-car producers, including the tax rate, will be announced after the Board of Investment conference on March 29. If the government is unable to promote Thailand as a production base for eco-cars, it won't be able to encourage the country's economy to grow to its target, he quoted Kosit as saying. The eco-car project is being pursued despite declining vehicle sales in Thailand following drop in consumer confidence amid unclear political and economic conditions. Industry Ministry permanent secretary Chakramon Phasukavanich said the sales volume of pickups and cars in the domestic market in the first two months dropped dramatically, due to a decline in consumer confidence, and that buyers were looking forward to special promotions from automobile companies at next month's motor show. Total domestic sales of pickups in the first two months of this year fell 27.5 per cent from 66,430 units in the same period last year. Total vehicle sales in the period reached 82,000 units, down 21 per cent from 103,883 units in the same period last year. The source said despite negative factors, auto-makers are still maintaining their domestic vehicle sales target of 700,000 units this year, representing a 3 per cent growth rate from last year. "However, if the sales in April are not good enough - after the motor show is held and the government speeds up its spending - we may consider revising our target for this year," Chakramon said.
Chalida Ekvitthayavechnukul
The Nation
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