Boi Considers Ways To Eliminate Red Tape

[george]

BoI considers ways to eliminate red tape

Incentives will go to firms, not projects

BANGKOK: The Board of Investment will consider granting investment incentives by company instead of by project to reduce delays and complications currently faced by applicants.

Currently, a company must apply for BoI privileges each time it embarks on a new project, causing difficulty in terms of accounting, taxes and machinery imports, said Somphong Wanapha, the BoI secretary-general.

``Project-based consideration is no longer used in most countries. With the new concept of providing incentives by company, manufacturers should be able to implement their projects faster and meet their schedules,'' he said.

The change will be part of a major amendment to the 27-year-old Investment Promotion Act, which academics from Chulalongkorn and Thammasat universities are currently studying. Details are expected to be completed at the end of this year.

Mr Somphong said numerous cabinet reshuffles over the past years had delayed the revision of the act, which normally took place every seven years.

Another revision being considered involves lifting the tax on profits transferred to Thailand by Thai companies investing abroad. Such an incentive has been used in neighbouring countries like Singapore, to encourage Thai manufacturers to invest overseas, he said.

``By investing in neighbouring countries, as well as China and India, we can take advantage of their natural resources and cheaper labour wages and manufacture cheaper goods for Thailand or add value before exporting to other countries,'' Mr Somphong said.

The BoI has set a target of domestic direct investment (DDI) at approximately 120 billion baht this year which also includes projects invested in overseas by Thai enterprises. DDI will account for 40% of the direct investment worth 290 billion baht this year in total, an increase of 15% over 270 billion baht approved by the board last year.

Three groups of industries have been earmarked for investment overseas. The first are the industries that the government has targeted for the country to become regional hubs including petrochemical, automotive and electronics parts, petroleum and processed agricultural products.

The second group comprises sectors facing shortages of raw materials and labour, including fishery, gems and jewellery, textile and garment, and livestock.

The other group consists of emerging sectors, such as telecommunications, tourism, restaurant and retail businesses.

--The Post 2004-02-03