PUBLISHED: 27 Sep 2024 at 04:56
The Thai government is set to implement a carbon tax, with enforcement targeted for this year, according to Deputy Finance Minister Paopoom Rojanasakul.
During his address at the “Road to Net Zero 2024: The Extraordinary Green” event, Rojanasakul revealed that the Finance Ministry is preparing to submit the carbon tax proposal to the cabinet for approval, with an implementation timeline of just months.
This initiative aims to motivate businesses to cut carbon emissions while ensuring minimal financial impact on the public.
Rojanasakul elaborated that fuel combustion across all types contributes to carbon emissions. He noted that under the new tax framework, the current excise tax rate will remain at 6 baht per litre, but will be divided into two components: 5 baht as the excise tax and 1 baht as the carbon tax.
This structure means that consumers will not incur additional tax costs, while oil companies will face varying tax liabilities based on their carbon emissions management strategies, encouraging greater emission reductions to lessen tax burdens.
Each tonne of carbon emitted by businesses will incur a cost, directly proportional to the carbon tax rate set by the government.
Rojanasakul emphasized that this tax will serve as a strong incentive for businesses to minimize their carbon emissions.
Additionally, the Excise Department plans to introduce a tiered tax system for batteries in the future, moving away from the existing flat rate of 8%. Under the new scheme, batteries with higher carbon emissions will be taxed at higher rates, while those with lower emissions will benefit from reduced rates.
Furthermore, companies that significantly curtail their carbon emissions could be eligible for tax refunds through a reverse tax system.
Thailand is committed to international environmental targets, which include reducing carbon emissions by 30-40% by 2030 and achieving carbon neutrality by 2050, with a long-term goal of net-zero emissions by 2065.
“If we continue as we are, we will not meet the 2030 goal,” Rojanasakul stated, highlighting the global shift towards environmentally friendly standards that make green certification a necessity for products.
Trade barriers related to environmental standards have risen by 16% annually over the past decade, leading to a current total of approximately 18,000 such barriers.
Despite these challenges, only 7% of Thailand’s exports are certified as environmentally friendly, and the nation’s clean energy usage remains low at just 13-14%, compared to 19% in neighboring Vietnam.
