Thailand Must Balance Tax, Industrial Strategy, SEC Says

Peeraphan Korthong, board member of the Securities and Exchange Commission of Thailand, has outlined his views on the direction and strategy of Thailand's industrial investment sector. He discussed the concept of trickle-down economics, which has underpinned Thai economic and social development policy since the first national development plan, arguing that benefits flowing to large investors and emerging industries will only reach small business owners and workers if the country enforces mechanisms for tangible value transfer—such as local content requirements, technology transfer, or joint workforce development with local suppliers.

"Without these mechanisms, trickle-down won't happen naturally. Investment money will concentrate among large players and foreign supply chains," Peeraphan said. He identified this as a shared risk for both the electric vehicle and data center industries, which require high capital investment but create relatively few domestic jobs per unit of investment if conditions are not set properly from the start.

Industrial development is not a matter of choosing sides, Peeraphan argued. Successful countries attracting long-term investment do not bet everything on a single trend, but instead focus on capturing as much production value as possible from every industry that enters—whether long-established sectors with 60 years of accumulated expertise or new industries flowing in with global trends.

"The role of an investment-receiving country is not to act as a judge deciding who stays and who goes, but to facilitate, promote, and incentivize all sincere investors to survive and grow together in the same system, equally," he said.

Data from the International Energy Agency shows electric vehicle and plug-in hybrid sales in Southeast Asia surged 62 percent in the March-June period, with Thailand among the region's fastest-growing markets—though this reflects consumer demand, not direct production strength. Meanwhile, China, the world's largest EV manufacturing base, saw domestic sales drop 16 percent after subsidy cuts and has redirected exports instead, with Chinese vehicle exports growing 65 percent in the first half, reaching roughly five million units. Thailand is one of China's major end markets, with Chinese brands already capturing nearly 30 percent of new car sales. The question, Peeraphan noted, is whether Thailand is becoming a production base or merely a market absorbing transshipped goods.

Thailand does have genuine EV manufacturing bases now, but the real question is whether "value added" is sufficient. Peeraphan acknowledged that over the past three to four years, numerous EV manufacturers have established actual production bases in Thailand, not just promises. The Board of Investment has approved more than 198 EV industry investment promotion projects worth over 137 billion baht, spanning vehicle production, batteries, and charging stations.

While this is a positive signal, Peeraphan said the government must answer bigger questions: how much production and employment has actually been created, and how much of that value has reached Thai supply chains, Thai parts manufacturers, and Thai workers? He cited the offset production conditions under the EV 3.0 measures as an example of the kind of enforcement mechanism needed.