The Finance Ministry plans to propose to the cabinet next month a revision of the battery tax from a flat rate for all battery types to a tiered rate, with more efficient batteries subject to a lower levy than less efficient batteries.
According to Deputy Finance Minister Paopoom Rojanasakul, the Excise Department is preparing to propose the new battery tax structure, which encourages manufacturers to produce more environmentally friendly batteries. He said the new battery tax structure incentivises batteries with higher energy density or better efficiency with a lower tax rate.
The current excise tax on batteries is 8% of the retail price.
Mr Paopoom said the new tax structure would apply to all types of batteries and was discussed with all relevant parties. These parties agree with the proposed revision because this industry is an emerging one that needs to prioritise environmental concerns, he said.
In the future, if the technology becomes outdated and generates a lot of pollution, production costs would increase due to higher tax rates, said Mr Paopoom.
In terms of a tax policy to promote the automotive industry, he said the government would not prioritise one type of vehicle over another, such as internal combustion engine (ICE)-powered vehicles and electric vehicles (EVs).
Domestic operators form part of the supply chain for this industry, which supports small and medium-sized enterprises (SMEs) and employment, so the government will continue to support the production of all types of vehicles, said Mr Paopoom.
"The government's automotive policy will strike a balance between EVs and ICE-powered vehicles. We should not abandon the ICE vehicle industry, which established a long-standing production base in the country and is an integral part of Thailand's auto parts supply chain, which is driven by SMEs and supports employment," he said.
Regarding US President Donald Trump's decision to walk away from climate agreements, the minister said the Thai government would continue to focus on green initiatives in order to combat trade barriers.
"We must prepare the country as we lag behind in several areas, such as reducing carbon emissions from oil usage, which accounts for 70% of the total greenhouse gas emissions in Thailand," said Mr Paopoom.
The cabinet approved on Tuesday a draft Finance Ministry regulation to impose a carbon tax of 200 baht per tonne of carbon equivalent, aiming to enhance the competitiveness of Thai goods in the global market.
The carbon tax is to be embedded within the current oil tax structure, with a portion of it an excise tax on oil and the rest a carbon tax. However, when combined, the overall oil tax rate remains unchanged.
Products subject to the carbon tax include gasoline and similar oils, various types of gasohol, kerosene and similar light-producing oils, jet fuel, diesel and similar oils, various types of biodiesel, liquefied petroleum gas, propane gas and similar gases, as well as bunker oil and similar oils.
