Finance Ministry plans tax perks for EV factories in Thailand

MGR Online•Economy•18d ago

Reader Briefing

The Ministry of Finance is developing a new tax incentive measure to encourage electric vehicle manufacturers to establish production plants in Thailand.

•Ekniti Nitithandpraphas announced new tax benefits for EV manufacturers who set up factories in Thailand.
•The measure is expected to be completed by September 2026.
•Eligible manufacturers must use domestically produced raw materials or parts.
•The new measure aims to create a second layer of price reductions beyond the existing EV 3.5 subsidies.

Overview

•Ekniti Nitithandpraphas proposed tax benefits for EV producers who establish factories in Thailand to integrate Thai labor and entrepreneurs into the supply chain.
•The details of the measure are under consideration and are expected to be finished by September 2026 for submission to the Cabinet.
•Ekniti Nitithandpraphas stated the goal is to promote investment in future industries, increase national competitiveness, and create fairness between domestic producers and importers.
•Under the proposed framework, importers who do not invest in domestic factories will continue to pay higher excise taxes.
•This new measure differs from EV 3.5, which provides direct subsidies to car companies to reduce prices for consumers.
•Under EV 3.5, BEV cars priced under 2 million Baht with batteries 50 kWh or more receive a 50,000 Baht subsidy and an excise tax reduction from 8% to 2%.
•If the new measure reduces manufacturer costs by approximately 6%, EV prices could potentially drop by an additional 36,000 to 60,000 Baht depending on the vehicle price.
•The Board of EV has adjusted rules to support exports, counting one exported EV as 1.5 units toward domestic production offset requirements.

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Key Quotes

Ekniti Nitithandpraphas

"The EV 3.5 measure requires the state to reserve huge tax funds for subsidies and carries high risk."

มาตรการ EV 3.5 ทำให้รัฐต้องสำรองเงินภาษีมหาศาล มาจ่ายเป็นค่าอุดหนุน และมีความเสี่ยงสูง

Key Entities

Person

Ekniti Nitithandpraphas(เอกนิติ นิติทัณฑ์ประภาศ)

Deputy Prime Minister and Minister of Finance who is proposing new tax incentives for EV manufacturers.

Organization

Ministry of Finance(กระทรวงการคลัง)ℹ️

The government ministry developing new tax benefits to attract EV production plants to Thailand.

Cabinet(ครม.)

The body that will consider the new EV tax measure after it is completed in September 2026.

EV Board(บอร์ดอีวี)

The board that adjusted rules to support the export of EVs produced in Thailand.

BOI

An organization providing corporate income tax reductions for BEV projects using at least 40% local content.

Policy

EV 3.5

A government measure providing direct subsidies and tax reductions to EV manufacturers to lower consumer prices.

Place

Thailand(ไทย)ℹ️

The country where the government is seeking to establish EV production bases and supply chains.