Jaguar seller says new tax rate could hit business
Inchcape Thailand Co, an importer and distributor of Jaguar and Land Rover, says it’s concerned about the way the new excise tax for cars, effective in mid-September, will be calculated.
The government has yet to formally announce details of the new tax rate and the computation formula that will apply to car distributors; however, Inchcape said the new tax may affect the way in which it does business.
From Sept 16 onward, Thailand’s amended excise tax law will change the base tax rate to take into account the recommended retail price of goods, rather than ex-factory prices and cost, insurance and freight (CIF) values.
The government says a tax system based on retail prices will create a fairer system for makers and importers after some were found to have been exploiting the ex-factory and CIF values to understate tax bills.
The act also authorises the directorgeneral of the Excise Department to determine recommended retail prices for use as a base for excise tax calculation in the event of disputes.
If the recommended retail price is not in line with the market price, the department will have the power to determine it. The value will be based on retail market prices or import prices.
The department is drafting 80 organic laws to facilitate the new base for excise tax computation.
Inchcape Thailand managing director Charnchai Mahantakhun said the details are not yet available but he is aware that the new tax measures will come into effect in September.
“At this time, not only Inchcape but also other distributors cannot calculate future prices or margins,” he said.
Mr Charnchai said t he new tax regime will affect Thailand’s automobile market as a whole, both importers and local manufacturers.
Imported cars are subject to an 80% import duty. In addition, all imported vehicles are also subject to a 10-50% excise tax based on CO2 emissions, a 10% interior tax and a 7% value-added tax.
Nonetheless, Mr Charnchai remains upbeat about the sales prospects for his three brands this year, though he declined to offer projected sales figures.
According to the Land Transport Department, Land Rover had 38 cars registered from January to May, followed by Jaguar with 23 and Range Rover with 11.
Last year, 73 units of Jaguar were sold, with Land Rover’s sales standing at 49 cars and Range Rover’s at 47.
Mr Charnchai said the overall sentiment for luxury cars and sport-utility vehicles is still positive, though competition has intensified with brands that run their assembly plants locally.
The British automotive retail and services company set up a local subsidiary, Inchcape Thailand, in July last year with registered capital of 100 million baht to handle the import and distribution of Jaguar Land Rover vehicles and parts in Thailand.
Earlier, the Jaguar and Land Rover brands were sold by authorised distributor and service provider City Automobiles Co, an affiliate of global automotive company RMA Group.
In a related development, Inchcape yesterday launched the Jaguar Land Rover Approved programme to offer its certified used cars for buyers, aiming to upgrade its reselling prices in the Thai market.
Inchcape has eight approved used cars that are 15-35% cheaper than new vehicles.