August 20, 2014 01:00 By Kwanchai Rungfapaisarn
New investment promotion measures to affect 80 businesses; bid to restructure the national economy
The Board of Investment yesterday gave the nod in principle to the new investment promotion strategy for 2015-21, which focuses on industries that will lead to a change in the country’s economic structure, the creation of value-added businesses and sustainable growth.
The new plan will take effect in January with the aim to strengthen the country’s competitiveness and wean it away from dependence on low-cost labour.
The seven-year timeframe conforms to the 11th National Economic and Social Development Plan for 2012-16 and the 12th plan.
The board meeting, chaired by junta chief Prayuth Chan-ocha, also endorsed measures to encourage small and medium-sized enterprises (SMEs) to improve their production efficiency and boost investment in the deep South.
BoI secretary-general Udom Wongviwatchai said this new investment promotion policy would apply to project applications filed after January 1. The BoI will go on a roadshow to introduce the new strategy to local and foreign investors from October-December.
“Under the new seven-year investment promotion strategy, the BoI will switch from the criteria of promoting on a broad basis to a focused and prioritised basis,” he said.
After the switch, 40 businesses, such as the makers of snacks and ready-to-drink green tea, will not receive support, while 40 others will not receive waiver of corporate income tax. Under the existing policy, about 240 business types enjoy BoI incentives.
The BoI would focus on industries that can propel Thailand to become a higher-income country with sustainable growth. It will also focus on facilitating non-tax issues such as the entry of foreigners to work in Thailand and labour-skill development.
The BoI will continue to promote investment in the same seven sectors – agriculture; ore; light industry; metal, machinery and transport equipment; electric and electronics equipment; chemicals, plastic and paper; and service and utility – but will focus more on the ones employing advanced technology, research and development and environmentally-friendly techniques.
Incentives will be activity- and merit-based. Priority will be given to both inbound and outbound investment. Zoning-based promotion would be scrapped in favour of cluster-based promotion.
The measures to increase SME competitiveness include extending the SME incentive scheme by three years from this year. The incentives will be given to SMEs in 35 selected sectors.
The meeting approved measures to encourage existing businesses to invest more in improving production efficiency, such as by replacing old machinery with energy-saving or green machinery and by spending more on R&D.
Those conforming to these measures will be awarded privileges such as waiver of import duties and waiver of corporate income tax for three years at a ratio of 50 per cent of the investment in machinery replacement.
To enjoy these incentives, they have to apply under this measure by 2017.
The meeting also endorsed the extension of the promotion programme in the four provinces in the deep South and four districts of Songkhla by three years to 2017.
The BoI approved 15 investment projects worth more than Bt40 billion, covering various industries including alternative energy, auto parts and biomass.
Since its first meeting on June 8, the BoI members, who were appointed by the junta, have approved 121 projects, including the 15 projects approved yesterday, with total investment value of Bt318.8 billion.