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PROPERTY
Colliers predicts tax breaks will matter
KANANA KATHARANGSIPORN
Despite the global financial meltdown and local political turmoil, the industrial property sector should continue to prosper in the next few years as the government considers extending property tax incentives and tax and duty privileges for investment, according to the property consultancy Colliers International (Thailand).
Managing director Patima Jeerapaet said the government was considering extending the property tax incentives, which directly benefit developers, for another year from the planned expiration date of March 28, 2009.
He said that Golden Wealth, a subsidiary of TCC Land, would develop half of its 20,000 rai in Cha-am for an industrial estate, golf course, resort and hotel before starting to develop a previously planned theme park.
At the same time, the Board of Investment (BoI) is considering extending the corporate tax exemption from eight to 13 years with zero import duty on raw materials used in manufacturing of exported products for Zone 3, an area covering 36 provinces.
''Even with the global economic problems, the Indian conglomerate Tata Group has kept its investment in automotive manufacturing in Thailand,'' he said. The Indian company is committed to use thousands of rai and will invest in the southern seaboard for steel manufacturing.
Mr Patima said automobile industry growth was also boosting demand in the Eastern Seaboard Industrial Estate. There are 105 major automotive suppliers and foreign firms looking to expand manufacturing plants in the area due to available facilities and the con venient location close to Bangkok and a deep-sea port.
Another industry with growth potential is ethanol production, with interest from both government and private sector, he said. The Industrial Estate Authority of Thailand plans to invest four billion baht to develop 500 rai of industrial estate in Khon Kaen, up from the current four rai.
Industrial estate developer Padaeng Industry also plans to develop a total of 60,000 rai in Tak for Mitr Phol Sugar Group to invest in ethanol. Currently, it has 13,000 rai and will add 30,000 rai next year.
The BoI planned to offer more tax and non-tax privileges in an attempt to achieve its investment target of 600 billion baht this year. Under the new campaign, the government expected to attract up to three trillion baht in foreign investment between 2008 and 2011.
However, the key factor in maintaining investor confidence and attracting foreign investors is the estates' quality of environmental management and their proven commitment in promoting the quality of life of surrounding communities.
Although Vietnam also draws industrial investors, Thailand offers better infrastructure and skilled labour, he said. Many investors have also realised that the quality of Chinese manufacturing is not up to world standards.
In the first six months of the year, the BoI managed to attract only 203 billion baht from 640 projects. The figure was 11% lower than in the same period last year and only 30% of the full-year target.
''The Japanese, the largest foreign investors, were worried about political stability in Thailand because protests might lead to delays in government implementation of economic policy,'' he said. ''That's why the BoI tried to attract investors with tax exemptions.''
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