Japan Seeks Luxury-car Tariff Cut

Japan has asked Thailand to speed up reducing tariffs on luxury cars under an agreement that has been stalled for four years.

The Japan-Thailand Economic Partnership Agreement (JTEPA) that took effect in 2007 calls for cutting the import tax on cars with engines above 3,000 cc by 5% annually until 2010.

The current rate stands at 80%.

The JTEPA also includes lowering taxes on original-equipment manufacturers of auto and steel parts for the automotive industry. But no progress has been made to date.

Industry Minister Wannarat Channukul on Sep. 12, 2011 said since it is essential for Japan to help Thailand train human resources under the Automotive Human Resources Development Institute project, Thailand should lower its import tax in return.

"However, Japan has not yet proceeded with this training programme, so the agreement has not been able to move forward," he said.

Japanese Ambassador Seiji Kojima made the request on Sep. 12, 2011 during a meeting with Dr Wannarat to discuss Thailand's industrial and investment policies.

"We also requested a continuity in policies of the previous government and those that were put in place a long time ago," said Mr Kojima.

Dr Wannarat said Japan remains determined to build an upstream steel factory in Thailand.

"I think this project will benefit the industrial sector, but the location needs to be appropriate, plus what's good for the environment must come first," he said.

Japan is the top foreign investor in Thailand, accounting for 30-40% of foreign projects receiving Board of Investment (BoI) privileges.

In the first seven months of this year, 312 projects applied for BoI incentives or 128 projects more than applied in the same period last year.