BANGKOK (Reuters – Thailand’s Cabinet approved tax incentives Tuesday to encourage a shift towards electric vehicles (EVs) and attract high potential foreigners to support the economy.

Vehicle tax measures include a reduction of import duty by up to 40% this year and next for fully built EVs over 2 million baht ($61805) and 20% for those between 2 and 7 millions baht.

Arkhom Termpittayapaisith, finance minister, announced that the government would reduce excise taxes on import EVs from 8% to 2%. This will allow for an expected increase of 7,000 EVs over the first year.

Under a plan previously announced to bring in a million rich foreigners including pensioners, the income tax rate was slashed from 35% – 17% to skilled foreign professionals working in certain industries or zones.

As part of the zero-emission vehicle strategy, Thailand approved the 2022-2025 EV plan last week. This is in line with a target of 30% of Thailand’s auto production being EVs by 2030.

Thailand is an important regional automaker. It typically produces around 2 million vehicles per year for companies like Toyota, Honda, and Mitsubishi.

Arkhom stated that eligible car makers will be entitled to subsidies in the amount of 70,000 baht or 150,000 baht per EV, and 18,000 for electric motorcycles.

Arkhom stated, “This is to promote investment and employment. Arkhom explained that it was necessary to encourage investment and employment.

In order to attract high-value foreigners, the plan aims at adding 1 trillion baht ($31billion) to domestic expenditures and increasing investment by 800 billion. It also aims to raise taxes revenue by 270 billion Baht.

($1 = 32.36 baht)