Thailand’s Excise Department is mulling a plan to adjust tax for new “Big Bike” motorcycles, based on CO2 emissions. The new rate could be increased to almost 100,000 baht for a high-powered big bikes.
The current tax rate calculation is based on engine sizes, which represent 2.5-9 per cent of the purchase value. The new rate if imposed will be increased to 3-18 per cent.
With the new rate, if a big bike motorcycles costs one million baht, an additional 90,000 baht tax could be applied. Depending on its CO2 emission.
If the Cabinet approved the new tax plan, it is likely to be put into effect at the beginning of next year. The excise tax will be collected once for new motorcycles, manufactured or imported.
Most motorbikes, used in the country will not be much impacted. Only big bikes motorcycles with higher fuel consumption and higher CO2 emission.
Under the plan, the starting tax rate of 3 per cent will be applied to motorcycles, emitting CO2 less than 50 grams per kilometer.
The highest rate of 18 per cent will be imposed on those with CO2 emission, exceeding 130 grams per kilometer.
Thailand Motorcycles Market is moderately declining with year to date September 2019 sales at 1.32 million units, down 2.8%. The market leader, Honda is in line with the industry while Piaggio is up 27%. Harley Davidson is doubling volumes. Others premium brands struggle, and following the last year record BMW lost 13%. While Ducati is -32% and KTM -70%
Global Motorcycle Production Hub
Thailand is a major motorcycle manufacturing base ranking in 5th place as regard to the production capacity (2 million), after China (23 million units), India (20 million), Indonesia (8 million) and Vietnam (3 million).
Thailand started the 1st motorcycle manufacturing in 1967 under the CKD system.
At the beginning decade of 1990, Thailand promoted the investment of four-stroke engine motorcycle instead of the two-stroke one to reduce emission problems. The production boosted reaching a capacity of 1.75 million annual units. The sales of motorcycles followed the development of the country representing the first device of personal mobility.
The introduction of a Free Trade Agreements (FTA) caused the cancellation of industrial protection measure. The industry started to export and to evolve in line with the global demand. Also learning new technologies. Later the country adopted state of the art rules for safety and emissions.
Nowadays, there are 8 motorcycle manufacturers in Thailand with total capacity of production at 3 million units per year. They are Honda, Harley Davidson, Yamaha, Suzuki, Kawasaki, BMW, Triumph and Ducati.
The motorcycle manufacturers are also located in the Central and East regions as its near to the seaport for export.