The Board of Investment (BoI) yesterday approved tax incentives for pharmaceutical and medical equipment makers.
The BoI is also looking to offer new privileges to specialised private hospitals with the aim of promoting Thailand's healthcare industry.
Secretary-general Hirunya Suchinai said the BoI meeting chaired by Prime Minister Prayut Chan-o-cha granted corporate income tax waivers for five years to pharmaceutical and medical equipment makers.
Investors filing for projects next year would be entitled to a corporate income tax exemption for eight years.
Previously, pharmaceutical and medical equipment makers were not entitled to any privileges from the BoI.
According to Mrs Hirunya, the government has included medical services in 10 targeted industries as part of the government's Thailand 4.0 initiative.
The targeted industries are automotive and auto parts, including electric vehicles; smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; and medical services.
Apart from stimulating investment in the medical sector, the government aims to make Thailand the medical hub of Asean.
Another goal is to upgrade existing entrepreneurs' production processes to comply with the EU's Pharmaceutical Inspection Cooperation Scheme.
Small and medium-sized enterprises making pharmaceutical and medical equipment would be also allowed to enjoy corporate tax exemption for seven years.
There are 175 existing pharmaceutical factories and 800 herbal factories.
The agency expects the new tax incentives would draw more investment applications in the medical industry worth at least 5 billion baht this year both from foreign investors and investment in existing factories.
Mrs Hirunya said the board also yesterday approved an increase in privileges for investment in three districts in southern provinces: Nong Chik in Pattani, Betong in Yala and Sungai Kolok in Narathiwat.
Investors are allowed double tax deductions for the cost of transport, electricity and water for 20 years from 15 now. They are also eligible to 90% import tariff cut for 10 years for imported raw materials used in manufacturing for domestic sales, up from five years, and full tax waivers for 10 years for materials imported in manufacturing for exports, up from five years.