In an effort to make Thailand more attractive for investment, the cabinet has approved more tax incentives.
Government spokesman Sansern Kaewkamnerd said the new proposal made yesterday would call for the government to exempt corporate income tax for 13 years, up from eight years.
It would also raise the reduced rate for corporate income tax to 90% for 10 years after tax holidays from 50% for five years now.
But the new privileges would be offered only to targeted industries such as those using high technology or promoting research and development.
Mr Sansern said the Board of Investment (BoI) would be responsible for preparing a list of industries that would be entitled to them.
"This will give the BoI a new tool for drawing more investment to Thailand," he said.
BoI secretary-general Hirunya Suchinai said after the cabinet's endorsement, the new tax incentive proposal would be sent to the National Legislative Assembly, with implementation likely next year.
The Federation of Thai Industries (FTI) recently called on the BoI to revise its investment promotion strategy to help attract more foreign investment.
The FTI believes the present privileges, launched early this year after 30 years under the previous scheme, are not attractive enough to draw investment, saying they are too complicated and hardly conducive to new investment during a global economic slowdown.
However, it does not want the government to switch back to the previous scheme, under which privileges were granted based on different zones for industry classifications.
FTI chairman Supant Mongkolsuthree said his agency would also ask the government to seek ways to cut the country's reliance on exports. He wants exports to account for 50% of GDP, down from 70%.
"The government should invest more in infrastructure and support tourism rather than rely too much on exports," said Mr Supant.
He also wants the government to move forward with plans for the digital economy by building infrastructure that would facilitate 4G communications, which would help to propel the economy at a cheaper cost.