Unused car orders to be cancelled

The Excise Tax Department plans to talk to dealers about scrapping the reservations of more than 100,000 potential car buyers who applied for the first-time car buyer tax rebate but have not taken delivery.

The cancellation of 120,000 car reservations in the scheme would terminate these potential purchasers' rights to obtain up to 100,000 baht each in excise tax rebates, said Somchai Pulsawas, the department's director-general.

Even though the cabinet resolution concerning the first-time car buyer scheme did not set a deadline for car delivery, sufficient time has passed for delivery and the department needs to close its tax rebate accounts, he said.

The first-time car buyer scheme was initiated by the Yingluck Shinawatra administration as part of the Pheu Thai Party's populist campaign promises during the 2011 general election.

The cabinet allowed first-time car purchasers who reserved passenger cars with a maximum engine size of 1,500cc and pick-up trucks priced less than 1 million baht before the end of 2012 to receive up to a 100,000 baht excise tax rebate when owners kept these cars for one year.

Car owners are prohibited from disposing of the cars within five years after delivery.

The programme was extremely popular as 1.25 million car buyers applied for the tax rebate. However, academics and economists lashed out, saying the scheme triggered a sharp increase in the country's household debt. The scheme was also credited with distorting the car market by stealing future demand and creating artificial demand.

Household debt crept up to 80.1% of GDP in the third quarter of 2013, from 79.2% in the second quarter and 56% in 2008.

Mr Somchai said the department will allow a few more months before encouraging dealers to cancel the reservations of those whose cars have not been delivered.

Some 20,000 of the remaining 120,000 car buyers are expected to take delivery, he said. About 845,000 car owners already received the tax rebate for a combined amount of 60.3 billion baht.

Share your thoughts

Discussion 1 : 11/02/2014 at 06:17 PM
Where every government in the world looks for reducing the number of cars on their roads, this populist Shinawatra offspring novice promotes the purchase of new cars as a populist measure or hidden vote-buying... After the failed tablet computers [to keep the people dumb] and the catastrophic rice-pledging scheme [which is straightforwardly a vote buying scheme for Northern + Easters red shirts], nothing remains from this populist PT government that is worth mentioning. In 2 single days Suthep gathered 15 million THB (gift) for the disgruntled farmers who have been cheated by these PT crooks led by the criminal from Dubai!
Discussion 2 : 11/02/2014 at 08:35 AM
Another failed PT policy….PT never looks at the future impact of their decisions, rising traffic, rising debt, lower future car demand…..short term fix again.
Discussion 3 : 11/02/2014 at 08:21 AM
Isn't the calculations wrong as 845000 divided with 60,3 billions = 845000 per head and not as mentioned up to 100000 in rebate? if the total is based on the 1.25 million byres is is around 753750 per head

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