The Excise Department plans to introduce a carbon tax on refined oil, initially aligning with the rate set by Singapore, according to the department’s director-general. Ekniti Nitithanprapas, director-general of the Excise Department, stated that a ministerial regulation for carbon tax collection is ready for cabinet consideration. The tax will be set at 200 baht per tonne of carbon, a rate comparable to Singapore’s initial carbon tax of S$5 per tonne. Singapore later increased its rate to S$25 (629 baht) per tonne.
Mr. Ekniti emphasized that the carbon tax would not directly impact the general public’s oil usage, as the current excise tax rate on oil remains unchanged. Currently, 6.44 baht per litre of oil is taxed, with 45 satang per litre allocated towards the carbon tax. However, businesses that reduce their carbon emissions can benefit from a lower tax burden.
Thailand emits around 372 million tonnes of carbon annually, with 70% of these emissions coming from the energy and transportation sectors. The energy sector alone accounts for 37% of the country’s total emissions. Thailand is committed to reducing its carbon emissions by 30-40% by 2030, with the goal of achieving carbon neutrality by 2050 and net-zero emissions by 2065.
In line with these environmental goals, the government has been promoting electric vehicles (EVs), which have already contributed to a reduction of 341,000 tonnes of carbon emissions.
Additionally, the Excise Department aims to position itself as an environmental, social, and governance (ESG)-focused entity. The department is preparing to propose a 0% tax rate on bioethylene, a plant-derived material used to produce bioplastic products, as part of efforts to protect the environment. Bioethylene, sourced from plants like cassava, can contribute to producing more sustainable plastic alternatives.
Furthermore, the department plans to propose a 0% excise tax on passenger vans modified for disabled individuals, supporting Thailand’s shift toward an aging society.
Mr. Ekniti also pointed to the department’s previous efforts to improve public health through a sugar tax introduced several years ago. The tax penalizes beverages with sugar content over 14 grammes per litre at 5 baht, while beverages with lower sugar levels face lower taxes. This has resulted in a significant reduction in the amount of high-sugar beverages in the market.
The Excise Department has performed well financially, collecting 482 billion baht in revenue during the first 11 months of the 2024 fiscal year, marking a 10.6% increase from the same period last year. The department aims to reach a full-year revenue target of 520 billion baht and has been tasked with collecting 600 billion baht in the 2025 fiscal year.
Officials and various stakeholders are set to review the carbon tax proposal and other fiscal measures in upcoming cabinet discussions.
