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Fiscal Policy to Develop Low-carbon Economy: The Case of Thailand

Fiscal Policy to Develop Low-carbon Economy: The Case of Thailand. Ms Sumalee Satitchaicharoen Director, Income and Consumption Tax Policy Division, Fiscal Policy Office, Ministry of Finance. Outline. (1) Government Policy on Low- carbon economy

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Fiscal Policy to Develop Low-carbon Economy: The Case of Thailand

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  1. Fiscal Policy to Develop Low-carbon Economy: The Case of Thailand Ms Sumalee Satitchaicharoen Director, Income and Consumption Tax Policy Division, Fiscal Policy Office, Ministry of Finance

  2. Outline (1) Government Policy on Low- carbon economy (2) Fiscal Measures to support Low- carbon economy (3) The challenge to develop low- carbon economy

  3. (1) Government Policy • 10th National Economic and Social Plan (2007-2011) and 11th National Economic and Social Plan (2012-2016) both pursue the low carbon Society or green economy. • Set up Committee on Climate Change Mitigation chaired by the Prime Minister. • Introduced Climate Change Mitigation Master Plan 2010-2013 • Introduced the new law to set up Thailand Greenhouse GasManagement Organization in 2006

  4. (1)Government Policy (cont.) Policy on Energy Focusing on - Energy efficiency, - Energy security, - Renewable energy development - Environmental protection

  5. 1. Government Policy (Cont.) Policy on Environment • Promote environmental-friendly consumption by improving recycling technology to encourage the prevention of pollution at the source of origin

  6. (2) Fiscal Measures to support Low- carbon economy • Taxes • Earmarked Fund

  7. Tax Incentive for CDM • Clean Development Mechanism (CDM) projects to be entitled to tax exemption for the first three years

  8. Tax Incentive on Machine and Equipment • Corporate Income Tax: Companies can deduct up to 1.25 times their actual investment in energy-saving machine and equipment. • Customs Duty: • Import duty is halved for energy-saving machine and equipment.

  9. Excise Tax • Petroleum Product • Automobile • CFC • Motorcycle • Battery

  10. Petroleum Tax Note: Gasohol refers to ethanol mixed with gasoline Biodiesel refers to a vegetable oil- or animal fat-based diesel fuel consisting of methyl ester.

  11. Tax on Automobile Regular Excise Tax on Passenger car

  12. Tax on Automobile (Cont.) Excise Tax on Low-carbon Car

  13. Excise Tax (cont.)

  14. New Taxes for the Environmental Management Under the Fiscal Measure for Environment bill, five environmental taxes would be applied as follows: 1) Water pollution tax 2) Air pollution tax 3) Tourist tax 4) Product tax 5) Other taxes or fees

  15. Earmarked Fund • Energy Conservative Fund (Petroleum Levy) - Granted to renewable energy and SPP subsidy and revolving fund (soft loan) • Environment Fund - Finance the projects or activitiesrelated environmental promotion

  16. (3) Challenges • How to evaluate the efficiency and effectiveness of fiscal measure • How to balance the Policy (subsidy and penalty) • How to integrate the fund for environmental management

  17. “Let’s move to Low Carbon Economy” Thank you E-mail: sumayai@mof.go.th

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