By Bamrung Amnatcharoenrit
Tourism and Sports Minister Somsak Pureesrisak and officials from the Tourism Council of Thailand (TCT) and the Board of Investment (BOI) have discussed ways of promoting investment in large tourism-related projects in an effort to push the sector's reven
Somsak said one avenue being explored was lowering the minimum investment required to qualify for tax breaks and other incentives to Bt100 million. Such projects could include large amusement parks and renovating existing hotels.
The minister met with BOI and TCT officials last Friday. It was the first time the BOI has been officially invited to discuss ways of moving projects forward with the ministry and the TCT. Currently, the BOI offers incentives on projects requiring investment of more than Bt500 million. The minimum requirement makes it difficult for some operators to qualify.
Investment to rise
The push to boost investment in tourism follows a meeting on the issue at which Prime Minister Yingluck Shinawatra called for tourism revenue to reach Bt2.2 trillion. She asked the BOI and the Finance Ministry to consider lowering import tax on amusement-park equipment from the current 25 per cent and reducing the minimum investment of Bt500 million required to receive incentives from the board.
The goal is to boost the national tourism industry, which comprises mainly small and medium-sized operators, and to lift Thailand’s competitiveness over regional rivals ahead of the 2015 launch of the Asean Economic Community.
TCT president Piyaman Tejapaibul raised the issue of the financial resources that are available to potential investors. She urged the government to consider such measures as offering MLR-3 (minimum lending rate minus 3 percentage points) or no interest in the first three years of a seven-year loan period.
Other possible measures include claiming double depreciation costs, exempting tax on machinery and equipment imports, and waiving corporate tax for eight years, Piyaman said.
The council president said criteria for hotels should be defined when offering incentives. Examples include requiring a hotel to operate for at least 10 years; investment of more than Bt100,000 per room; or spending on renovations amounting to at least 4 per cent of total revenue for three financial years.
In the cruise-ship and passenger-boat sector, the TCT has asked the BOI to offer incentives to boat-building projects valued over Bt50 million. The council also wants to promote the purchase of new boat machinery.
BOI secretary-general Udom Wongviwatchai voiced support for the proposals and vowed to consider the possibility of expanding investment promotions. He pointed out that the tourism industry was one of the country’s major revenue contributors, on the strength of a rising flow of foreign tourists into the Kingdom.