Thailand is planning to adjust its excise tax rate on vehicles to close loopholes exploited mainly by importers such as declaring low cost, insurance and freight (CIF) valuations.
Thailand’s Excise Department is pushing through a new law that would set a lower rate of excise tax based on the retail price of a vehicle rather than the declared CIF.
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The net effect is expected to be higher tax collection from imported vehicles, resulting in either an increase in the retail price of imported cars, a squeeze on import/dealer margins or a combination of the two.
Somchai Poolsawasdi, director general of the excise department, said there was a big discrepancy between the CIF price and the retail price of many imported vehicles at present.
The new excise tax bill was approved by the Thai cabinet in May but must still be approved by the National Legislative Assembly (NLA).
If approved, it is expected to increase excise tax revenues by around THB6bn (US$180m) a year.
