THAILAND on Tuesday has approved fresh perks to woo foreign investors and relocate their production base in the country.
The approved package includes tax incentives, special investment zones for individual countries, future amendments to the Foreign Business Act to ease foreign investment, incentives supporting human resource development in advanced technology, with non-promoted projects of the Board of Investment (BoI) made eligible for tax privileges.
Under the BoI’s additional privileges, the new perks specifically reduced corporate income tax (CIT) by 50 percent for five years for investment projects amounting to 1 billion baht in 2021, with deadline for applications by the end of 2020.
The BoI is also tasked to approve waivers of CIT on all sizes of investment to non-BoI promoted businesses for investors seeking swift relocation.
Operators that employ highly skilled personnel in advanced technology will also be allowed to claim their payment as an expense to deduct from taxable income during 2019 to 20 at up to 150 percent, as compared with zero at present.
Meanwhile, operators who invest in automation systems for production upgrades can enjoy a deduction of 200 percent in CIT from 2019 to 2020, from only 150 percent at present.
According to Kobsak, the new package will enable Thailand to compete with other countries in Asia for foreign investment, especially to attract advanced tech firms that want to move production to Thailand.
He said the next economic ministers meeting is likely to consider measures to stimulate exports and tourism.
The BoI expects about 5,000 companies to apply for the measures covering 40,000 workers in advanced technology.
Likewise, the Cabinet has approved the investment of some 10 billion baht to support the establishment of an academy for advanced technology in Thailand.
Earlier, BoI Secretary-General Duangjai Asawachintachit said that the board would promote foreign investment through partnering up with related agencies to conduct proactive marketing and roadshows in China, Japan, Taiwan and South Korea.
“Thailand’s economic development policy is similar to South Korea’s New Southern Policy, China’s Belt and Road Initiative and India’s Look East Policy,” she said.
“Thailand also has a geographic advantage to link with the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy scheme and Cambodia, Laos, Myanmar and Vietnam,” she added.
In a separate development, Finance Minister Uttama Savanayana said the cabinet on Tuesday approved the extension of the 7 percent value-added tax (VAT) rate for an additional year until September 30, 2020, aiming to boost domestic consumption.
The government is estimated to lose 240 billion baht worth of revenue from the VAT extension.