Cabinet approves amendments to Investment Promotion Act
The Cabinet yesterday approved draft amendments to the Investment Promotion Act that was proposed by the Board of Investment with the aim of stimulating investment by providing new incentives and tax measures.
The existing Investment Promotion Act has been in use since 1977 and the BOI believes that it is outdated, ineffective in terms of promoting new investment, and does not provide enough incentives, which led to the proposal for the new law.
"The existing tax measures and incentives have been tested by the BOI and have been found to be ineffective now, so some tax measures will be revised and new incentives will be provided to encourage more investment in the country," said Government Spokesman Maj-General Sansern Kaewkamnerd.
"The government and the country do not lose anything by amending the tax measures and increasing the incentives, but what we will gain is an increase in the private sector’s motivation to invest."
The BOI says it has made sure that the new incentives and tax measures do not violate the World Trade Organisation’s regulations. The highlights in the new law are the tax exemption for the import of machinery and raw materials that are going to be used for research-and-development purposes and the exemption of corporate income tax for up to 13 years for targeted businesses, such as those focused on R&D and innovation.
These exemptions will have to be considered by the BOI’s incentive committee first.
Other tax measures include deductions for investment costs and the extension of dividend payment. The new law will also allow outsiders to help the BOI inspect imported machines and raw materials to reduce inspection time.
