BANGKOK, Thailand – Thailand is advancing tax reforms for the battery industry while introducing financial measures to boost economic growth and support key sectors.
Deputy Finance Minister Paopoom Rojanasakul announced plans to restructure the battery tax system to encourage electric vehicle (EV) adoption and environmental sustainability.
Currently, all battery types are taxed at a flat rate of 8%, but a tiered tax system is being considered to differentiate between rechargeable batteries, weight classifications, and environmentally friendly battery disposal systems. Batteries with effective recycling processes may qualify for a reduced tax rate starting at 1%. The proposal is expected to be presented to the Cabinet in the second quarter of 2025.
The Finance Ministry is also addressing challenges in commercial vehicle financing, particularly for pickup trucks used in small businesses. With banks tightening lending policies, the government plans to involve the Thai Credit Guarantee Corporation to guarantee loans for commercial pickup truck buyers. The initial phase will be a pilot program through the state agency’s board, without requiring immediate budget approval from the Cabinet. The conditions for this initiative are expected to be finalized before the long Songkran holiday next month.
Regarding economic performance, GDP growth in the first quarter of this fiscal year is projected at 3.3-3.4%, outpacing last quarter of last year due to strong consumer spending, tourism, and industrial production. However, the 3rd quarter of this year is expected to be a low season, necessitating further stimulus measures. The Finance Ministry also urged the Bank of Thailand to consider easing loan-to-value (LTV) restrictions on second-home purchases to stimulate the real estate sector. While LTV regulations were originally imposed to curb speculative buying, current market conditions show no signs of overheating, making adjustments viable for economic recovery.
The Thai stock market remains volatile due to global uncertainties and trade wars among major economies. However, long-term projections remain positive, with expectations that the market index will reflect Thailand’s economic fundamentals as growth indicators continue to improve. (NNT)
