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GM unhappy with new excise tax structure

Martin Apfel, president of GM Thailand/Southeast Asia and Chevrolet Sales Thailand, said GM agrees in principle with lowering CO2 emissions, but is concerned about the lack of clarity of the new tax structure, which could be submitted to the Cabinet within the next 60 days.

He said the industry, represented by major auto-makers, was previously asked by the government to submit their suggestions, but details on the new tax structure were not released.

“This makes a big difference because it tells you how you plan your OEM operations,” he said.

GM is also concerned with special benefits offered to particular technologies, which would not provide a level playing ground.

“The government said it wants to make a simpler system but it turned out that there are different benefits for certain technologies,” he said.

According to the present excise-tax structure, hybrid and alternative fuel vehicles are bound to lower taxes than other types of vehicles.

“We don’t believe that this would create a level playing field, and this issue could be overshadowed by the election process while it is being passed,” Apfel added.

He said the Thai government should not underestimate the impact of the new tax system on the industry. And if the motive behind the excise-tax restructuring is mainly driven by environmental issues, then the government should also focus not only on new vehicles but those that are already running on the roads.

“Buses and heavy trucks make up 10 per cent of the auto population yet they produce a much higher level of pollution than the others, and they need to be fitted with additional equipment for lowering emissions such as diesel particle filters,” he said.

Apfel said the road tax system also needs to be restructured in order to lower the number of old and high-pollution vehicles on the road.

“There are examples from around the world that can be followed,” he noted.

Many developed countries around the world have higher taxes for older vehicles which encourages consumers to purchase new and more environmentally-friendly models, he said

“To me in a nutshell, let customers choose, let the best car win and make the rules as simple as possible,” he said.

In the first four months of this year, Chevrolet sales surged by more than 70 per cent to 9,810 units, and GM has decided to expand the ongoing construction of its new US$500 million (15 billion) engine plant in Rayong.

The plant, which will require additional $25 million to $50 million in investment due to planned increase, will produce 106,000 diesel engines per year.

Chevrolet is due to launch its new one-ton pickup truck later this year along with another new passenger car model.

Source: The Nation

ThaiVest Editorial Team