Car tax rebates fall short of target but Excise revenues rise
The government’s tax rebate scheme for first-time car buyers was expected to result in 90 billion baht being handed back to consumers, but according to the director-general of the Excise Department the rebate has totaled just 78 billion baht.
At the same time, the Excise Department head reported its tax collections for the first nine months of the fiscal year, which ended in June, totaled 336 billion baht which was almost eight per cent higher than its original target. There is a full fiscal financial year target of 412 billion baht in revenue collections and the department expects to achieve this figure.
Under the first-time car buyer scheme more than 1.25 million units were sold. Rebates of up to 100,000 baht off the purchase price of specially selected passenger sedans and pick-up trucks were available to those who qualified under the scheme.
As it happened, the chief reason for the lower than expected rebate level was more first-time buyers purchased pick-up trucks than had been expected.
Pick-ups are taxed at a lower rate than passenger vehicles and average 20,000 baht per vehicle.
Around 260,000 single-cab and 259,000 double-cab pick-ups were sold under the program.
The Excise Department stated that as of the end of the first week of July, 319,975 people had received tax rebates amounting to 21.9 billion baht. All told, 1.04 million people had taken delivery of vehicles under the program. A further 209,578 people were awaiting delivery of their ordered vehicles.
Despite a belief in some quarters that the scheme would be heavily abused, the figures from the Excise Department suggest this has not been the case. They claim just 19 buyers are being subjected to legal action after having been discovered violating the terms of the rebate scheme. One of the terms of the agreement is that motor vehicles cannot be on-sold for a period of five years from the date of purchase. Of course, this figure is expected to rise, possibly quite substantially in subsequent years as people find repayments difficult or they simply want to be rid of the expense of running a motor vehicle. Whether the Excise Department will pursue future offenders with any vigour is open to debate.
As of the start of July, 4,380 registered buyers had declined to accept their vehicles, more than likely due to reduced financial circumstances. Another 750 applicants were disqualified as being ineligible, chiefly because they were found to have previously owned a motor vehicle. It’s not known whether the Excise Department is intending to institute legal action against these people for attempted fraud.
On the overall revenue side, the Department expects the end of the diesel sales subsidy in October will help fuel an expected 12 per cent growth in tax receipts.