Finance Ministry Targets September Deadline for New Tax Structure
Thailand's Finance Ministry is preparing an overhaul of vehicle excise taxes, offering lower rates to carmakers that establish genuine production operations in the country and use locally manufactured materials or components. Fully built-up vehicles imported without an accompanying investment in Thai production would remain subject to higher excise rates. Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas said eligible manufacturers would need to invest in an operating factory, use domestic materials and begin producing vehicles for export.
Permanent Secretary Lavaron Sangsnit and Excise Department Director-General Pornchai Thiraveja have been instructed to complete the proposed structure by September 2026. It would be issued as a ministerial regulation under the Excise Tax Act and could take effect later this year after the Cabinet considers the details. Ekniti said the restructuring could boost domestic production, protect employment and increase government revenue from consumers who continue to choose imported vehicles.
Japanese and Chinese Automakers Weigh In as EV Imports Surge
The review responds to a surge in imported electric vehicles, which industry groups say has come at the expense of domestic manufacturers and the country's automotive supply chain, home to more than 800,000 workers. Imported EVs currently face a 10% excise tax compared with 2% for vehicles assembled locally, a gap that industry representatives argue is too small given that manufacturing in China can be 30-40% cheaper. Toyota Motor Thailand and Honda Automobile Thailand have both urged the government to revise the tax structure, with Honda seeking lower import duties as it prepares to invest more than 12 billion baht to expand production capacity.
Chinese EV manufacturer XPeng said it had been studying the possibility of establishing production in Thailand for about six months and was preparing for a possible increase in taxes on imported EVs. Economic officials expressed confidence that Thailand, which has built an automotive supply chain with Japan over more than three decades, would remain a strategic production base for the region even as neighbouring countries court investment from major manufacturers.
