Thai govt offers tax breaks in bid to boost investment

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ECONOMIC MEASURE
Govt offers tax breaks in bid to boost investment
Erich Parpart,
Sucheera Pinijparakarn,
Petchanet Pratruangkrai
The Nation


(From Left) Finance Minister Apisak Tantivorawong.and Deputry Prime Minister Somkid Jatusripitak

BANGKOK: -- IN AN all-out effort to boost private investment, the Cabinet has approved an unprecedented package of Finance Ministry and Board of Investment (BoI) tax incentives to encourage companies - both well-established and new - to go ahead with their business plans.

The latest package is the third in a series aimed at revitalising the economy, whose growth has slowed to less than 3 per cent this year due to sluggish exports and private investment.

The Finance Ministry will allow businesses to double their capital-expenditure deduction for corporate income tax, covering new investment in machinery and equipment, vehicles and other approved capex.

This will be valid for 14 months, until the end of next year.

In addition, the BoI will extend tax privileges for promoted firms by a maximum of another four years. Foreign investors are waiting for political stability, Deputy Premier Somkid Jatusripitak said yesterday, adding the government wanted to encourage those businesses capable of investing to go ahead with their plans now, instead of waiting any longer.

Companies granted BoI privileges between 2014 and 2016, and managing to complete at least 70 per cent of their investment project before June 2016, will receive four more years of privileges on top of the regular eight years.

As to BoI-promoted businesses managing to invest 50 per cent before June next year, they will receive three more years, while BoI businesses that are unable to invest more than 50 per cent before the given time will receive a two-year extension.

Regarding the Finance Ministry's measure, it is applied to all businesses as the government wants to urge companies to invest now in order to increase their competitiveness.

"I am confident that this package will increase the level of domestic investment in the last two months of this year and next year, and allow them to compete better," said Finance Minister Apisak Tantivorawong.

Meanwhile, the Cabinet also approved the Public-Private Partnership (PPP) committee's measure to fast-track six PPP projects worth Bt347 billion combined , under which the whole process - before bidding and procurement - will be completed within nine months, instead of one year and 10 months. The measure will cover six projects due to commence next year.

They are expected to include those already approved by the State Enterprise Policy Office, namely, Metropolitan Rapid Transit's elevated Pink Line project and the Yellow Line, worth Bt56.7 billion and Bt54.7 billion, respectively.

"This is part of the economic reform [policy]," said Somkid, "and we are aiming to apply this PPP fast-track process to all government processes, where instead of sending papers to be signed for approval from 10 ministries, we will now try to bring all the representatives from related agencies to form one task force, in order to increase the ease of doing business in this country."

Prime Minister Prayut Chan-o-cha is set to have a meeting this Friday with all agencies related to the ease of doing business.

Sombat Thiratrakoolchai, director and member of the executive board of the Thai Chamber of Commerce, and president of the Thai-Russian Chamber of Commerce, said the fast-track PPP measure would help stimulate economic activity amidst the global slowdown.

While the Joint Standing Committee on Commerce, Industry and Banking welcomes the fast-tracking of PPP projects, some PPP projects should be open for foreign investors to join, said Isara Vongkusolkij, chairman of The Thai Chamber of Commerce.

Even though the Kingdom has sufficient reserves, the government should allow foreign investors to jointly invest in some PPP projects, which would help make infrastructure projects more transparent, he said.

Boontuck Wungcharoen, chairman of the Thai Bankers' Association, said the fast-track PPP measure would help speed up private investment, which in turn would drive the flow of economic activity.

Chansak Fuangfu, senior executive vice president of Bangkok Bank, said the private sector would be happy with fast-tracking. It had proposed such a measure to Prayut's first Cabinet, because fast-tracking would accelerate infrastructure projects, which would help growth.

Source: http://www.nationmultimedia.com/business/Govt-offers-tax-breaks-in-bid-to-boost-investment-30272213.html


-- The Nation 2015-11-04

[trogers]

Tax breaks are not attractive when the main hurdle is that requirement for 51% Thai-owned...

[BlindMagician]

Please come and invest. I know we are scr$%&ng up this country, but please come....please...pleeeeeeaase.

[Toknarok]

There will be little or no new investment in Thailand under the present undemocratic regime. Foreign investors don't like military juntas. They don't like 51% of their firm having to be Thai owned. They don't like the tedious red tape and kickbacks necessary to get started. They don't like 'single gateways' slowing down their use on the net. The list goes on....

Offering tax breaks for just one year isn't going to change the situation.

[Ulic]

The answer is simple. Just allow foreigners to own 100% of businesses.

[TheCruncher]

Foreign investors are waiting for political stability, Deputy Premier Somkid Jatusripitak said yesterday, adding the government wanted to encourage those businesses capable of investing to go ahead with their plans now, instead of waiting any longer.

And what has a 1 year tax incentive to do with justifying political instability that may last another 10 or 20 years?

Edited November 4, 2015 by TheCruncher

[myprivate]

The answer is simple. Just allow foreigners to own 100% of businesses.

That's it. Totally agree. I personally know of two large foreign corporations that bypassed Thailand due to 49% restriction.

[myprivate]

The answer is simple. Just allow foreigners to own 100% of businesses.

That's it. Totally agree. I personally know of two large foreign corporations that bypassed Thailand due to 49% restriction.

And whilst we are on the subject, what's the point in having an EU if they still haven't managed to negotiate this sort of unfair trading practice (unfair because USA citizens can own 100% here, and Thai citizens can own 100% in EU).

[Yme]

Populist policies for the business sector now and signs of how the economy is really doing

[heybruce]

Businesses invest in countries with stable, transparent government. Rule by decree, promised but unspecified reforms, rewriting of the constitution an indefinite work in progress, suspension of the constitution whenever it suits the military, and elections that keep being kicked down the road don't translate to stable government. Censorship and leadership that doesn't like questions about their finances don't translate to transparency.

Promising tax breaks is like sprinkling sugar on a turd sandwich, no one is going to bite.

[Cook my sock]

How about cancelling that illogical 'Eco' car tax? It's going to kill the market even more next year and finally drive out Japanese investment. As a result it won't make any extra revenue for the government

It shd be brought in only in conjunction with the Japanese carmakers when they are ready to launch a series of Eco cars for the Thai market.

Edited November 5, 2015 by Cook my sock

[Thai at Heart]

How about cancelling that illogical 'Eco' car tax? It's going to kill the market even more next year and finally drive out Japanese investment. As a result it won't make any extra revenue for the government

It shd be brought in only in conjunction with the Japanese carmakers when they are ready to launch a series of Eco cars for the Thai market.

Well, having industry writing environmental law is a little ass about face