The Excise Department is preparing to adjust tax conditions to promote plug-in hybrid electric vehicles (PHEVs) by removing the requirement related to the size of the fuel tank, supporting Thailand as a production hub for this type of vehicle.
Speaking after visiting the BMW and BYD car manufacturing plants at Amata City Rayong Industrial Estate, Deputy Finance Minister Paopoom Rojanasakul said the tax structure rejig for PHEV vehicles will remove the tax privilege criteria regarding the fuel tank size, which is currently set at 45 litres.
The criteria for CO2 emissions will also be removed, while the excise tax structure for PHEVs and hybrid EVs (HEVs) will be separated, he said.
Mr Paopoom said the fuel tank size requirement for PHEVs could reduce the incentive for manufacturers to set up production bases for these vehicles in Thailand.
He said fuel tank sizes vary by region, while the CO2 emission criteria for PHEVs caused manufacturers to focus on improving the quality of internal combustion engines (ICEs) to reduce CO2 emissions rather than focusing on electric battery development.
The new PHEV tax structure will come into effect in 2026, and the revised conditions are under consideration for submission to the cabinet, said Mr Paopoom.
He said the tax rate for PHEVs should be competitive, but declined to provide details.
The current PHEV tax structure set to take effect in 2026 is based not only on CO2 emissions, but also range and fuel tank size. PHEVs with an electric range of at least 80 kilometres per charge and a fuel tank size not exceeding 45 litres are taxed at 5% of the value, while PHEVs with an electric range of less than 80km per charge or a fuel tank size exceeding 45 litres are taxed at 10% of the value.
Kulaya Tantitemit, director-general of the Excise Department, said the criteria revision, particularly regarding range per charge, aligns with global standards for PHEV development, which will help promote and establish Thailand as a production base for PHEVs that meet international standards and consumer demand both domestically and abroad.
This shift should help attract investment in Thailand's automotive industry, enhancing competitiveness during the transition from ICE-powered vehicles to EVs, she said.
In addition, removing the fuel tank size requirement will save manufacturers from having to modify tank sizes in vehicles that already passed international safety standards, reducing costs by eliminating the need to conduct new safety tests for vehicles produced here, said Ms Kulaya.
