Tariff cuts on IT goods expected to boost export opportunities
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THE National Legislative Assembly has given the nod for Thailand to cut customs tariffs on 524 information technology-related goods under a World Trade Organisation accord. The move is expected help promote the Kingdom’s economic growth by 0.66 percentag
The tariff reductions will commence on July 1.
Commerce Minister Apiradi Tantraporn said that the NLA had agreed to reduce the tariffs under the expansion of the Information Technology Agreement (ITA), which should help Thailand become more competitive in the IT industry and create opportunities to export more products to the United States and the European Union.
These 524 items will have their tariffs cut at different periods.
The ministry expects that move will save about Bt4.7 billion in duty payments, especially for goods exported to countries the Kingdom does not yet have free-trade agreements with.
It highlighted the manufacture of monitors, on which the US levies a 5-per-cent tariff, video cameras and digital cameras, on which the EU levies a 14-per-cent tariff, as being among those to benefit the most from the development.
The agreement, which involves 52 WTO member states, should also boost the Kingdom’s IT industry, the ministry said.
“Thailand, as one of the world’s suppliers of IT products, should benefit from the agreement as member countries will cut tariffs and other fees for trading in these products while helping develop new technology and innovations among one another,” Apiradi said.
The minister said that the tariff cut would enhance the competitive edge of Thai businesses, as they could import raw materials under the agreement and manufacture products at a lower cost.
He said this would help lure foreign investment to Thailand, which had promoted the establishment of super clusters for the production of electronic and digital products.
Currently, the value of foreign direct investment in Thailand’s IT sector is Bt70 billion and the industry employs more than 65,000 people. Of the 524 items to benefit from tariff cuts, 94 are subject to a tax reduction to zero within three years.
Among them are starters for electric motors and filters for movie projectors. The existing average custom rate for the 94 products is 9.7 per cent.
The other 82 items, including a certain kind of inductor, will see their tax cut to zero in five years from an average of 10.7 per cent at present.
The remaining six items, such as inverters, will see their tax cut to zero in seven years from the current average of 10 per cent.
Malaysia has 410 items earmarked to have tariffs cut to zero – 360 immediately. The Philippines has 743 items – 526 immediately.
The US and EU markets, which are Thailand’s main targeted export markets, have 450 and 581 items respectively earmarked for zero tariff.
