FTI slams plan to halve im­port duty

Bangkok Post - - BUSINESS -

The Fed­er­a­tion of Thai In­dus­tries (FTI) has crit­i­cised a plan to slash im­port car duty from 80% to 40%, say­ing the mea­sure will harm the coun­try’s au­to­mo­tive in­dus­try in the long run.

The FTI’s au­to­mo­tive clus­ter, con­sist­ing of the au­to­mo­tive and auto parts in­dus­try clubs, to­gether with the Thai Au­to­mo­tive In­dus­try As­so­ci­a­tion and the Thai Au­toparts Man­u­fac­tur­ers As­so­ci­a­tion, wants the gov­ern­ment to main­tain the 80% im­port duty to pre­serve the coun­try’s lo­cal man­u­fac­tur­ers.

In a re­lease, the FTI cited an an­nounce­ment on Feb 9 by the In­de­pen­dent Car Im­porter and Dis­trib­u­tor As­so­ci­a­tion that the Fi­nance Min­istry had ac­cepted the as­so­ci­a­tion’s re­quest to cut the im­port duty and that a new rate of 40% would be pro­posed for cabi­net ap­proval and take ef­fect soon.

The FTI said that once the duty de­clines to 40%, lo­cal car pro­duc­tion will lose at­trac­tive­ness and car im­ports will surge.

“The FTI is much con­cerned be­cause the over­all au­to­mo­tive in­dus­try con­trib­utes more than 10% a year to the coun­try’s GDP,” the fed­er­a­tion said. “More­over, there are 850,000 work­ers in the sec­tor from up­stream to down­stream, con­sist­ing of car­mak­ers and auto parts mak­ers that com­bine for over 2,500 firms.”

The au­to­mo­tive in­dus­try club said last month that over­all car out­put last year to­talled 1.989 mil­lion units, up 2%.

In 2016, Thai­land ranked 12th in terms of world car pro­duc­tion and was the top pro­ducer in South­east Asia.

The FTI said a cut in im­port car duty would not suit the gov­ern­ment’s goal of sup­port­ing long-term for­eign di­rect in­vest­ment in the au­to­mo­tive in­dus­try and lo­cal pro­duc­tion.

More­over, the gov­ern­ment is keen on the flag­ship East­ern Eco­nomic Cor­ri­dor (EEC), which the au­to­mo­tive in­dus­try plans to use for a su­per­clus­ter to at­tract fur­ther in­vest­ment from for­eign mak­ers.

The In­de­pen­dent Car Im­porter and Dis­trib­u­tor As­so­ci­a­tion, rep­re­sent­ing grey op­er­a­tors, has asked the Fi­nance Min­istry and Cus­toms Depart­ment to cut im­port duty on cars for the past sev­eral years.

Ac­cord­ing to as­so­ci­a­tion chair­man Som­sak Sri­ratanapra­pas, Thai­land’s im­port duty is high rel­a­tive to other coun­tries’ rates and lo­cal man­u­fac­tur­ers and dis­trib­u­tors have a mo­nop­oly in the car mar­ket.

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