Investment/BoI

Investment/BoI
Chatrudee Theparat

BoI to be urged to revise the strategic investment promotion plan proposal following PM suggestions

Prime Minister Prayut Chan-o-cha ordered the Board of Investment (BoI) to revise a draft of new Thailand strategic investment promotion plan and re-submit to the board for approval soon in a bid to make the plan more strategic to attract more foreign investors next year.

Government spokesman Anucha Burapachaisri

Government spokesman Anucha Burapachaisri said Gen Prayut, who chaired the BoI board meeting on October 12, ordered the BoI to revise a draft of new investment strategy plan (2023-2027) following suggestions of the committee to cope with the changes both global and national arenas.

“The prime minister wants BoI to move faster to improve the draft following a suggestion of the committee and propose the board again to approve the plan before its official introduction next year, which is aimed to attract more foreign investors to drive Thai economy in line with the global relocation situation”.

Currently, the BoI is revising the country’s strategic investment promotion plan, with scrutinizing its details based on national and global trends.

“The revision of investment incentives to cope with the global change and avoid the impact of the new world tax regimes proposed by the Organization for Economic Co-operation and Development (OECD).”

Under the global change, tax regime shows a big change. The global minimum corporate tax will be collected at 15%, taking effective in 2023 with companies having a revenue of at least €750 million globally per year. Also, governments worldwide can collect a higher corporate tax rate of the parent company located in their countries to 15% if its affiliated companies that invest worldwide pay less than 15% in corporate tax, according to the OECD plan.

In addition, global investment trends have changed as well. Greenhouse gas emission requirement is for example. Evolving technology and the impact of Covid-19 outbreaks reminds the business sector to do more carefully and usefully. R&D, bio-, circular and green (BCG) economic development, and medical and S-curve industries are under its focus.

Thailand’s new strategic investment plan will be in place in early 2023 after the current eight-year plan expires in December 2022.

The BoI currently offers the highest privileges to investors: a corporate income tax exemption for eight years, and a 50% reduction in corporate income tax for five years once the tax holiday lapses if the applicable projects invest in R&D or human resources development.

In addition, Gen Prayut advised BoI over some investment promotion details to lure investment into the flagship Eastern Economic Corridor (EEC) and also over incentives offer to four special economic zones aimed at drawing investment to provincial areas.

The Special Economic Zone Policy Committee’s meeting on May 26, chaired by Gen Prayut, approved four new special economic corridors, modeled after EEC, in an effort to stimulate the economy and decentralize income.

The new zones include the Northern Economic Corridor (NEC), the Northeastern Economic Corridor (NEEC), the Central-Western Economic Corridor (CWEC), and the Southern Economic Corridor (SEC).

The NEC covers 4 provinces - Chiang Rai, Chiang Mai, Lamphun, and Lampang – aimed at turning the cluster into the center of creative economy.

The NEEC comprises Khon Kaen, Udon Thani, Nakhon Ratchasima, and Nong Khai provinces. Due to rich raw materials in the area like rice, tapioca, and sugar cane, This northern corridor is expected as a production base for the bio-economy and its supply chain.

The CWEC, a western corridor, includes Ayutthaya, Nakhon Pathom, Suphan Buri, and Kanchanaburi. It will be transformed as a manufacturing base for agriculture, tourism, and high technology.

Chumphon, Ranong, Surat Thani, and Nakhon Si Thammarat are part of the southern corridor. It will play a role as the bio-economy, trading, and logistics hub to connect the Andaman Sea, the Gulf of Thailand, and Indian Ocean-rim countries such as India, Sri Lanka, and Bangladesh.