More incentives for flood-hit provinces
The Board of Investment has approved new incentives to boost projects in industrial estates in Ayutthaya and Pathum Thani provinces, which were hit hard by last year's floods. Submissions for BOI privileges in those areas have been quite low, while those
Secretary-general Atchaka Sibunruang said yesterday after a BOI board meeting that the new incentives had been agreed to attract more investment in Ayutthaya and Pathum Thani, where several industrial estates were inundated in late 2011. Unlike those provinces, applications for the Eastern region, particularly Rayong and Chon Buri, are increasing as investors want to avoid risk from floods in the Central region.
According to BOI data, applications for investing in Ayutthaya in the January-February period were for 24 projects with a combined investment value of Bt13.094 billion. For Pathum Thani province, there were 15 projects with a combined investment value of Bt13.384 billion.
The applications for Chon Buri province during the same period were for 40 projects worth a combined Bt21.483 billion, while Rayong saw applications for 37 projects worth a combined Bt53.252 billion.
Atchaka said the BOI was concerned that if it did not offer more privileges to attract new projects from both newcomers and existing players, the investment climate in both flood-hit provinces would get worse.
A source from the BOI board said the Finance Ministry had not objected to the new privileges despite the expected loss of revenue from corporate income tax, as the government wants to boost the economies of Ayutthaya and Pathum Thani.
Industry Minister Pongsvas Svasti said investment projects in industrial estates in Pathum Thani, which is categorised as a Zone 1 province that normally offers fewer incentives, would now enjoy an exemption from corporate income tax for eight years, up from three years currently. The tax exemption will now be limited to 150 per cent of the total investment value, up from 100 per cent currently.
Investment projects in estates in Ayutthaya province, which is categorised as Zone 2, will enjoy an eight-year tax waiver, up from seven years currently. There, too, the exemption limit is increased to 150 per cent of total investment value from 100 per cent under the current scheme. In addition, the tax holiday can be extended for three years, but on 50 per cent of total investment value.
New investments will be also be offered tax waivers for importing machinery.
Pongsvas said that to be eligible for the new incentives, investors must submit their application by December 31.
"The new privileges are expected to bring not only economic benefits, but social ones," he said. "We would like both to maintain jobs and create new ones in Ayutthaya and Pathum Thani provinces, where many factories are located. We don’t want social problems due to decreased investment to occur," he said.
The BOI board yesterday also approved 11 investment projects worth a combined Bt83.89 billion. The biggest project was a gas-fired power plant operated by Gulf JP UT worth Bt47.73 billion. The power plant will be located in Rojana Industrial Park, Ayutthaya province.
A project of Nippon Steel Galvanizing (Thailand) worth Bt10.346 billion will also benefit. That project aims to produce 360,000 tonnes of galvanised steel per year to serve the demands of the automotive industry.
