Smaller flex-fuel vehicles tax breaks

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Smaller flex-fuel vehicles tax breaks 
Bangkok Post: 22 Jan 2011
Smaller flex-fuel vehicles may receive tax breaks

The government agrees with proposals to expand tax incentives to cover flex-fuel vehicles (FFVs) with smaller engines, after approving more favourable rates for engines larger than 1,780cc effective early this month.

Tax incentives should be more equitably available across all car classes, said Praphon Wongtharua, director of the Biofuel Development Bureau of the Energy Ministry.

The ministry is also committed to working with other government agencies to expand the tax incentive scheme and promote the country's drive toward the commercial production of viable flex-fuel alternatives, he said.

The Finance Ministry recently approved a reduction of three percentage points in excise tax rates for some flex-fuel vehicles, which can use a variety of fuels up to E85 gasohol, a blend of 85% crop-derived ethanol and 15% petrol.

The new tax rates are 22% for engines of 1,780 to 2,000cc, 27% for 2,000 to 2,500cc and 32% for 2,500 to 3,000cc.

An Energy Ministry official said ex panding tax incentives would promote more ethanol-based fuel consumption and encourage auto makers to produce more ethanol-based fuel vehicles.

The ministry aims to increase ethanol use to 9 million litres per day in 2023 from 1.3 million through the promotion in FFVs and E20, a blend of 20% ethanol and 80% petrol.

General Motors Thailand said it had urged the government to also provide tax incentives for FFVs with smaller engines.

``Small FFVs with engines between 1,400 and 1,600cc may well be the pivotal segment in creating widespread demand for and acceptance of flex-fuels,'' said Vanchana Unakul, general director for product engineering with GM Southeast Asia.

GM Thailand plans to launch its first FFVs in Thailand later this year.

There are currently 16 million FFVs on the roads worldwide, mainly in Europe zone, the US and Brazil, which is world's largest producer of ethanol.

There are only about 2,000 FFVs operating in Thailand now, and only eight service stations that sell E85.

http://www.bangkokpost.com/business/economics/217593/smaller-flex-fuel-vehicles-may-receive-tax-breaks