Si Racha Set To Be A Customs-free Zone

[george]

Si Racha set to be a customs-free zone

Plan for district as a regional centre

The Finance Ministry will offer tax privileges to help establish Si Racha in Chon Buri as an energy hub for the region.

Kitti Limskul, the finance vice minister, said the region would offer a customs-free zone as well as corporate taxes of just 10%, compared with the normal 30% rate.

The government wants to position Thailand as an energy trading hub for the region eventually rivalling Singapore and taking advantage of the country's central proximity to China, Laos and Vietnam.

Policymakers also say that the country's current dependence on Singapore as a shipping point for oil results in added costs of as much as US$1.10 per barrel.

Si Racha already is used by PTT Plc and Thai Oil Co as a centre for tank farms and storage facilities.

Dr Kitti said establishing Si Racha as a zone free from import tariffs and excise taxes would help promote oil trading.

As a customs-free zone, imported crude oil for refining or blending and subsequently exported as petrochemical products would incur no tax liability, replacing the current time-consuming process where taxes are paid first then refunded against exports later.

To encourage investment, the ministry was considering offering a special corporate tax rate to companies operating in the new zone.

Under the plan to make Thailand an energy centre, new ``land bridges'' would be constructed in the form of pipelines linking tank farms in Phangnga across to Nakhon Si Thammarat on the Gulf of Thailand.

This in turn would allow shippers to cut short transportation time when compared with having to run southwards of Singapore and the Lomboc straits in Indonesia.

Dr Kitti said the ministry was also in discussions with the Bank of Thailand to allow the development of paper swaps and options for the oil trade.

--Bangkok Post 2003-12-22