Cut in BOI privileges opposed

Parts of both the public and private sectors oppose the Board of Investment's plan to cancel privileges for some agriculture and textile businesses, which are already reeling from the recent increase in the minimum wage.

Duangjai Asawajinjit, deputy secretary-general of the BOI, said yesterday that under a revamp of the agency's promotion strategy for new projects, special support would be given for environmentally friendly industries while incentives would be withdrawn for 11 industries. These include hydroponic vegetable cultivation, forestation, organic fertilisers, animal feed or animal-feed mix, baked-dry plants and silos, and deep-sea fishing.

The others are animal butchery, leather tanning, animal hide and fur preparations, confectioneries, chocolates, chewing gum, cold-storage operations and deliveries, and farm management.

For the natural-rubber industry, the BOI support will cease for the initial phase of processing, such as concentrated rubber latex, rubber sheets, rubber rods and mixed rubber. Production of rubber wheels will be categorised under industrial promotions, while agricultural residues and by-products will receive non-duplicating privileges, such as baked-dry, solar-dry, or pellet-formed.

Light industries such as textiles and garments; carpets; shoes, bags and sporting goods; stationery; toys; musical instruments; fishing nets; sandpaper; households items; medical equipment; cotton; and first-aid bandages, gauze, hats and face masks are also cut off.

Nattapol Rungsitpol, director of the Industry Ministry's Industrial Policy Office Branch 2, said ending privileges would discourage business start-ups, as previous promotions have not been successful. Local businesses need tax breaks as they are subject to informal taxes such as special fees or contributions to specific funds. Industrial goods still depend on imports and exports, so such special fees should get special consideration along with BOI privileges.

An Agricultural Economics Office expert said the loss of privileges for organic fertilisers would make their producers unable to compete with chemical fertilisers.

Sutinee Poopaka, director of the Thailand Textile Institute, said that in Asean, only Thailand and Indonesia had integrated textile industries. If the BOI cancels textile promotions, this will be a major blow to the industry, which is already wobbling from the new minimum wage.

The industry still has a bright future abroad and locally, Sutinee said. Indonesia continues to promote its textile industry with a target to cut the export tariff to zero next year.