BOI okays full privileges for 13 industries in five SEZs

Meanwhile, the BOI aims to approve at least 1,600 projects worth around Bt1.4 trillion this year. It says more than 700 projects worth about Bt117 billion have already been approved in the first three months of 2015.

The 13 target industries, which cover 61 sub-industries, that invest in the SEZs in Tak, Sa Kaew, Trat, Mukdahan and Songkhla will receive a maximum of an eight-year corporate-income-tax exemption. For the following five years, they can enjoy a 50-per-cent income-tax reduction. Industries that are in Group A1 or A2 of the BOI privilege list but are not among the 13 target industries will receive additional income-tax exemptions for three years.

The Finance Ministry is also looking to halve the corporate income tax from the norm of 20 per cent for businesses that invest in SEZs but are not on the BOI privilege list. This is awaiting Cabinet approval.

Hirunya Suchinai, acting secretary-general of the BOI, said the administrations of the five provinces would choose which of the target industries they would host. “The BOI will later announce which industries the provinces have picked,” she said. 

The 13 industries are: agriculture, fishery and related businesses; ceramics; garments, textiles and leather; home furniture; jewellery and fashion accessories; medical tools; automobiles, engines and parts; electrical appliances and electronics; plastics; medical products; logistics; industrial estates; and activities that support tourism.

Hirunya said industries that have applied for BOI privileges since it announced its new seven-year (2015-21) investment promotion strategy were software projects, cloud services, international headquarters, international trading centres, high-tech medical tools, and automotive-safety parts. These are all industries that the BOI wants to promote.

Projects approved last year are expected to start investing in the second half of this year. She said their investment value would be about Bt700 billion, mostly for power plants, automotive projects and electronic parts. The BOI also approved a relaxation of its criteria regarding used foreign machinery. A BOI-approved operator can now use machinery that has been in service for up to 10 years, double the previous five-years cap. As well, foreign businesses moving their production bases here can use machinery that is more than 10 years old. However, in neither case will the operators receive any import-tax reduction. 

Thai Chamber of Commerce chairman Isara Vongkusolkit said the BOI had approved reducing the room-number requirement for investment promotion from 200 to 20, but there must be a minimum investment of Bt2 million per room.

Federation of Thai Industries chairman Supant Mongkolsuthree said the government had approved an increase in the proportion of a loan to a small or medium-sized enterprise that the Thai Credit Guarantee Corporation (TCG) will provide from 18 per cent to 30 per cent. “The increased TCG credit guarantee will provide SMEs with better financial access from commercial banks, and the state banks’ low-interest-loan policy will reduce investment costs. These two measures should help increase the level of investment of SMEs,” he said.

Wimonkan Kosumas, acting director general of the Office of Small and Medium-sized Enterprises Promotion, said volume of SMEs’ exports and imports of raw materials had increased in the past two months, good signs that SMEs are responding to support measures.