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Fiscal Policy to Develop
Low-carbon Economy:
The Case of Thailand
Ms Sumalee
Satitchaicharoen
Director,
Income and Consumption Tax Policy Division,
Fiscal Policy Office,
Ministry of Finance
Outline
Ministry of Finance,
Thailand
Tax Policy Bureau
(1) Government Policy on Low- carbon
economy
(2) Fiscal Measures to support Lowcarbon
economy
(3) The challenge to develop lowcarbon economy
(1) Government Policy
Ministry of Finance,
Thailand
Tax Policy Bureau
 10th National Economic and Social Plan
(2007-2011) and 11th National Economic
and Social Plan (2012-2016) both pursue
the low carbon Society or green
economy.
 Set up Committee on Climate Change
Mitigation chaired by the Prime Minister.
 Introduced Climate Change Mitigation
Master Plan 2010-2013
 Introduced the new law to set up
Thailand Greenhouse Gas Management
Organization in 2006
Ministry of Finance,
Thailand
Tax Policy Bureau
(1) Government Policy (cont.)
Policy on Energy
Focusing on
- Energy efficiency,
- Energy security,
- Renewable energy development
- Environmental protection
Ministry of Finance,
Thailand
1. Government Policy (Cont.)
Policy on Environment
• Promote environmental-friendly
consumption by improving
recycling technology to encourage
the prevention of pollution at the
source of origin
Tax Policy Bureau
Ministry of Finance,
Thailand
(2) Fiscal Measures to
support
Low- carbon economy
 Taxes
 Earmarked Fund
Tax Policy Bureau
Ministry of Finance,
Thailand
Tax Incentive for CDM
• Clean Development Mechanism
(CDM) projects to be entitled to
tax exemption for the first three
years
Tax Policy Bureau
Ministry of Finance,
Thailand
Tax Policy Bureau
Tax Incentive on Machine and
Equipment
• Corporate Income Tax:
Companies can deduct up to 1.25
times their actual investment in
energy-saving machine and
equipment.
• Customs Duty:
Import duty is halved for energysaving machine and equipment.
Ministry of Finance,
Thailand
Excise Tax
 Petroleum Product
 Automobile
 CFC
 Motorcycle
 Battery
Tax Policy Bureau
Ministry of Finance,
Thailand
Tax Policy Bureau
Petroleum Tax
Type of Petroleum
Gasoline
Gasohol E10
Gasohol E20
Gasohol E85
Diesel
Bio-Diesel
Excise Tax Rate
(Baht per Litre)
7
6.3
5.6
1.05
5.31
5.04
Note: Gasohol refers to ethanol mixed with gasoline
Biodiesel refers to a vegetable oil- or animal fat-based diesel fuel consisting of
methyl ester.
Ministry of Finance,
Thailand
Tax on Automobile
Tax Policy Bureau
Regular Excise Tax on Passenger car
Engine Size
Excise Tax Rate
(%)
below 2,000 cc
30%
>2,000-2,500 cc
35%
>2,500-3,000 cc
40%
>3,000 cc
50%
Tax on Automobile (Cont.)
Ministry of Finance,
Thailand
Tax Policy Bureau
Excise Tax on Low-carbon Car
Car Type
Vehicles consuming
ethanol content fuel
≥ 20%
Eco Car
Hybrid Electric
Vehicles, Electric
Powered Vehicles or
Fuel Cell Powered
Vehicles
Excise Tax Rate (%)
25% ,30%,35%
17%
10%
Ministry of Finance,
Thailand
Tax Policy Bureau
Excise Tax (cont.)
Type of Product
Excise Tax
Rate
Batteries
- Made from recycled
batteries
- others
Motorcycle
- Two stroke engine
- Four stroke engine
CFC
5%
10%
5%
3%
30%
Ministry of Finance,
Thailand
Tax Policy Bureau
New Taxes for the Environmental
Management
Under the Fiscal Measure for
Environment bill, five environmental
taxes would be applied as follows:
1) Water pollution tax
2) Air pollution tax
3) Tourist tax
4) Product tax
5) Other taxes or fees
Ministry of Finance,
Thailand
Earmarked Fund
Tax Policy Bureau
 Energy Conservative Fund
(Petroleum Levy)
- Granted to renewable energy and SPP
subsidy and revolving fund (soft loan)
 Environment Fund
- Finance the projects or activities
related environmental promotion
Ministry of Finance,
Thailand
Tax Policy Bureau
(3) Challenges
 How to evaluate the efficiency
and effectiveness of fiscal
measure
 How to balance the Policy
(subsidy and penalty)
 How to integrate the fund for
environmental management
Ministry of Finance,
Thailand
Tax Policy Bureau
“Let’s move to Low
Carbon Economy”
Thank you
E-mail: [email protected]