Customs facilitation reform urged by Thailand’s finance minister to boost automotive sector

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Finance Minister Arkhom Termpittayapaisith recently issued an appeal to the Customs Department of Thailand to streamline the customs facilitation formalities for both exports and imports. His appeal is aimed especially at boosting the activity of the automotive field.

Following a discussion held with a group of investors from Japan in the core of June, Arkhom instructed the department to better customs facilitation, thereby enhancing and accelerating the processes involved in import and export. This is deemed crucial given the significant presence of Japanese investors in the country, particularly within the automotive industry’s realm. They utilise Thailand as a major production base and source of raw materials.

A prominent issue globally within the automotive industry has been the critical shortage of certain electronic components, including notably chips. This shortage critically hampered the supply chain, causing buyers to endure an extended waiting period. In light of this, Arkhom believes a fast-tracked customs facilitation process would stabilise the supply chain, reported Bangkok Post.

Citing the high demand within Thailand’s automotive market that surpasses many other nations, Arkhom stated that Japan wishes for an expedited process for importing auto parts from Thailand. This would not only ensure the timely distribution of export orders but would also contribute to domestic sales. He said…

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“Many buyers in Thailand are inclined to invest in top-end variants or premium cars that require more parts than regular cars.”

Interestingly, Japan also sought assistance from Thailand to align the product codes about both imports and exports, with traded goods adhering to an international system of harmonisation. This system is employed worldwide by customs authorities for product identification during the assessment of duties and taxes. The process involves deploying a 10-digit classification code. However, Arkhom pointed out that discrepancies could occur between different codes used by importers and customs authorities, causing variations in import tariffs and interruptions in customs clearance procedures.

To resolve this, Arkhom said…

“A platform should be established to facilitate data sharing and fostering mutual understanding.”

Arkhom emphasised the significant role of Japan as Thailand’s principal foreign investor, further advancing the country’s exports towards the global market.

“While supply chain issues are experienced worldwide, our Customs Department can actively facilitate the movement of raw materials along the supply chain.”

Responding to rumours regarding Isuzu’s possible relocation from Thailand to Indonesia, Arkhom clarified that Japan has affirmed its commitment to its current base in Thailand.

A recent report issued by Krungthai Compass, a research subsidiary of Krungthai Bank, revealed that Thailand led globally in exporting auto parts, spares, and accessories last year. The value of these exports constitutes 12.3% of Thailand’s GDP.

The research firm further predicted that Thailand’s auto parts market would witness a value of 1.51 trillion baht for this year, reflecting a 1.3% growth from the previous year. With a projected 2.6% expansion for 2024, this growth is supported by three key factors: the increasing domestic and international growth of the automotive industry, a surge in the number of used cars and motorcycles older than five years, and a promising export market.

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Alex Morgan

Alex is a 42-year-old former corporate executive and business consultant with a degree in business administration. Boasting over 15 years of experience working in various industries, including technology, finance, and marketing, Alex has acquired in-depth knowledge about business strategies, management principles, and market trends. In recent years, Alex has transitioned into writing business articles and providing expert commentary on business-related issues. Fluent in English and proficient in data analysis, Alex strives to deliver well-researched and insightful content to readers, combining practical experience with a keen analytical eye to offer valuable perspectives on the ever-evolving business landscape.

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