Cabinet nod for fund to back 10 targeted sectors
Cabinet has approved in principle a Finance Ministry proposal to set up a Bt10-billion fund to boost national competitiveness and new investment projects in 10 "future" industries targeted by the government.
These sectors were identified by the Industry Ministry and expected to be new engines for national economic growth. The industries consist of five sectors which will be upgraded technologically and five industrial clusters.
They cover next-generation cars; smart electronics; affluent, medical, and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels; and biochemical, digital, and medical sectors.
Finance Minister Apisak Tantivorawong said: “The fund will be used to support our policy objective beyond what the BoI (Board of Investment) can offer to investors. There will be new legislation to implement measures under this proposed fund. Cabinet approval is expected in the next one to two weeks.”
Visut Srisuphan, deputy finance minister, said funding sources include the fiscal budget and off-budget money. Details will be submitted to Cabinet shortly.
Earlier, the Finance ministry proposed that surpluses from the health promotion fund and the national sports development fund should be used to finance the national competitiveness fund to upgrade industries lagging behind other nations due to sluggish new investment over the past few years. At present, health promotion and sports development funds get money from a 2 per cent earmarked tax on tobacco and alcoholic beverage sales.
Tax exemption, extra incentives
The government is capping the two funds at Bt4 billion and Bt2 billion per year, respectively, so that surpluses can be diverted to other uses, including the national competitiveness promotion fund.
Companies supported by the BOI currently get a corporate income tax exemption for up to eight years. If they invest in new projects that are covered by the government’s 10 “future” industries, they will get additional incentives from the Finance Ministry via the national competitiveness fund.
The proposed fund will also provide personal income tax breaks for researchers and other experts to encourage expatriates to work here for know-how |transfer in the 10 targeted industries.
Two committees will be set up to implement this policy aimed at large multinational firms. One will be chaired by Prime Minister Prayut Chan-o-cha and the other by deputy premier for economic affairs Somkid Jatusripitak.
Somkid will also lead a delegation of economic ministers to Japan today to try to persuade Japanese firms to invest in the 10 targeted industries, the super clusters, the special economic zones on Thai borders with neighbours, plus infrastructures projects.
The Federation of Thai Industries’ chairman, Supant Mongkolsuthree, told The Nation that the national competitiveness fund should be attractive to large firms wanting to invest here.
He said the government should act as facilitator and make it convenient for foreign investors to launch projects here so Thailand can be a more innovative and competitive manufacturing base for multinational firms.
