Thailand's Finance Ministry is preparing a new excise tax framework for electric vehicles (EVs), hybrid vehicles, and plug-in hybrids, with a proposal expected to reach the Cabinet for approval by the end of September. The specific tax rates have yet to be disclosed, according to the ministry's permanent secretary Lavaron Sangsnit, as reported by the Commerce Ministry’s website on September 20.

The move comes as the country's EV industry represents roughly 2% of its gross domestic product and 15% of total exports. However, the Revenue Department's director-general Pongchai noted that some vehicle models are heavily reliant on imports, which poses a risk to the domestic production base.

To maintain Thailand's status as the region’s automotive manufacturing hub, the department plans to establish a three-tier excise tax system, with investment and the ratio of locally sourced components serving as the primary criteria. The first tier, carrying the lowest rate, would apply to companies that manufacture within Thailand and use a high proportion of local parts. The second tier, with a moderate rate, would target businesses that import vehicles for market testing while also planning local production investments. The third tier, featuring the highest rate, would be imposed on companies that only import and sell vehicles without any investment or manufacturing plans.

The Revenue Department intends to implement the third tier first in order to slow the inflow of imported vehicles that lack tangible investment in Thailand. This tax rate is expected to exceed the current 10% import standard.

Separately, the National Electric Vehicle Policy Committee has decided to establish two subcommittees to oversee EV manufacturing, supply chain and used battery management, along with the development of a nationwide charging station network. Additionally, the committee has tasked the Finance Ministry’s permanent secretary with studying measures to promote electric buses, trucks, and motorcycles, while also launching discussions with the private sector regarding the transition period for the new tax system.