The cabinet yesterday approved a new investment stimulus measure through which the government pledges funds to match local administrations' investments.
Kobsak Phutrakul, assistant minister to the Prime Minister's Office, said the government would allocate 9.897 billion baht from the annual central budget to match funds to 7,851 local administrative organisations' plans to invest the amount this year and next.
Investment projects will focus largely on road development, drinking water development, water development for agricultural purposes and infrastructure projects to support tourism, as well as projects to improve quality of life for children, the elderly, the disabled and low-income earners.
Investment projects are required to not overlap with those already planned for within the 2017 budget.
Local administrations need to propose investment projects in the fourth quarter of this year, while budget disbursement is required to be finished in the second and the third quarter of 2017.
Development projects must be implemented between Oct 1, 2016 and Sept 30, 2017.
Currently, local administrative organisations control a whopping 300 billion baht in left-over funds.
Yesterday the cabinet approved an extension of the 7% value-added tax (VAT) rate for another year, until Sept 1, 2017.
The 7% tax rate is set to expire on Sept 30. VAT was first introduced in 1992 at a rate of 10%, but was immediately slashed to 7% at the request of businesses.
The VAT extension is estimated to cost the government 256.9 billion baht.
Mr Kobsak said the VAT extension would help retain the momentum of Thailand's economic recovery, after a 3.2% expansion in the first quarter and 3.5% in the second quarter.
Nathaporn Chatusripitak, an adviser to Commerce Minister Apiradi Tantraporn, said the cabinet also approved the draft 12th National Economic and Social Development Plan (2017-2021).
The national development plan to be implemented between Oct 1, 2016 and Sept 31, 2021 has set targets of 5% annual GDP growth and a per capita income of US$8,200 (286,500 baht), up from $6,000 now.
The 12th development plan involves 10 strategies, with an estimated 3 trillion baht in state investment.