Bangkok:The Federation of Thai Industries (FTI) has announced its support for the government's automotive policy, which includes a significant 35% increase in import excise tax aimed at encouraging domestic production.
According to Thai News Agency, the FTI has endorsed the government's policy direction for the Thai automotive industry, following the Cabinet's approval of the excise tax restructuring. This restructuring applies to Battery Electric Vehicles (BEVs) and Range Extended Electric Vehicles (REEVs) imported as complete units, with the tax increase set to take effect on January 1, 2027. The FTI believes this measure will bolster the development of domestic industry and production.
Ms. Pimjai Leeissaranukul, President of the Federation of Thai Industries, highlighted the importance of the excise tax restructuring, stating it plays a crucial role in supporting domestic industry by creating fair trade conditions. This policy signals Thailand's commitment to attracting investment, transferring advanced technology, and creating jobs for Thai people and SMEs, thus enhancing long-term economic value.
The Thai automotive industry, contributing 10% to the GDP and employing over 800,000 individuals, is poised for growth with the new tax structure. It is expected that the industry will expand by at least 7%, reaching a production volume of no less than 1.55 million vehicles, contingent on the stock imported before the new tax takes effect.
Aligned with the Reinvent Thailand strategy, the excise tax measures for imported vehicles aim to transition the automotive industry from a focus on quantity to high-value creation. This includes advancing multi-powertrain technology and supporting future components and autonomous vehicle systems.
Looking ahead, the FTI is committed to developing a comprehensive Thai automotive ecosystem. This includes fostering cooperation and attracting foreign investors to expand investment in parts manufacturing and R&D centers in Thailand. The strategy seeks to integrate Thai parts manufacturers and SMEs into global supply chains, thus driving Thailand towards becoming a leading global automotive manufacturing and export hub.