|
Truck makers call for fairer tax treatment
Malaysia tempting some manufacturers
Bangkok Post – 11 August 2008
SANTAN SANTIVIMOLNAT
Mid-sized and heavy truck manufacturers say a cut in their tax burden is essential for them to withstand competition from Malaysia.
Without new taxation rates, Thailand-based truck makers claim Malaysia could tempt manufacturers to relocate, threatening industries with an annual turnover of 11 billion baht.
''We are struggling for survival in such tough conditions,'' said Pichit Ratchawong, executive vice-president of Nissan Diesel (Thailand) Co. ''We don't expect better tax rates than Malaysia provides to its industry. We simply want tax privileges that help improve our competitiveness.''
Executives from all Japanese and European truck companies in Thailand _ Hino, Isuzu, Nissan Diesel, Fuso, Volvo, Mercedes-Benz and Scania _ plan to lobby new Industry Minister Mingkwan Sangsuwan for lower taxes.
Mr Pichit suggested that zero tax on imported assembly kits would be one method to promote exports.
Assembly kits coming into Thailand carry 11% duty against zero in malaysia.
As well, since February, trucks imported from Malaysia have been duty-free under the Asean free trade area.
Kits for truck tractors qualify for a low 10% import duty. However, importers must place bank guarantees with the Customs Department, which hurts commercial viability.
Mr Pichit said some manufacturers now faced cashflow crises because bank guarantees worth 1.2 billion baht have been frozen since last year pending approval from the Finance Ministry.
The industry earlier complained of cost disadvantages to Chakramon Phasukvanich, the permanent secretary for Industry, without receiving a response.
''We have been following up developments from the Finance Ministry and the Customs Department since 2006 but no progress has been made so far,'' said Mr Pichit.
The executives estimate that unless the industry's tax burden is lightened, Thailand could lose five billion baht annually in truck parts manufacturing and six billion baht in body building.Currently, Thailand's truck market is slightly larger than Malaysia's, with 14,630 trucks sold in 2007 compared to Malaysia's 13,560.
|
