The cabinet on Tuesday greenlighted fresh perks to woo foreign investors looking to relocate their production base amid the Sino-US trade war.
The package covers tax incentives, special investment zones for individual countries and future amendments to the Foreign Business Act to ease foreign investment.
Kobsak Pootrakool, deputy secretary-general for political affairs to Prime Minister Prayut Chan-o-cha, said the package also offers incentives to support human resource development in advanced technology, with non-promoted projects of the Board of Investment (BoI) made eligible for tax privileges.
Under the package, entrepreneurs can enjoy a corporate income tax deduction of 250%, up from 200% now, for business investment or training expense in advanced technology during 2019-20.
Operators that employ highly skilled personnel in advanced technology will be allowed to claim their payment as an expense to deduct from taxable income during 2019-20 at up to 150%, compared with zero now.
The BoI expects about 5,000 companies to apply for the measures covering 40,000 workers in advanced technology.
Operators who invest in automation systems to upgrade their production are also allowed a deduction of 200%, up from 150%, from corporate income tax during 2019-20.
Mr Kobsak said the cabinet on Tuesday approved allocating 10 billion baht from the Competitiveness Fund to support establishing an academy for advanced technology in Thailand.
According to Mr Kobsak, the new package will enable Thailand to compete with other countries in Asia for foreign investment, especially to attract advanced tech firms that want to move production to Thailand.
He said the next economic ministers meeting is likely to consider measures to stimulate exports and tourism.
Duangjai Asawachintachit, secretary-general of the BoI, said earlier that the board would promote foreign investment by teaming up with related agencies to conduct proactive marketing and roadshows, focusing on China, Japan, Taiwan and South Korea.
"Thailand's economic development policy is similar to South Korea's New Southern Policy, China's Belt and Road Initiative and India's Look East Policy," she said. "Thailand also has a geographic advantage to link with the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy scheme and Cambodia, Laos, Myanmar and Vietnam."
In a separate development, Finance Minister Uttama Savanayana said the cabinet on Tuesday approved the extension of the 7% value-added tax (VAT) rate for an additional year until Sept 30, 2020, aiming to boost domestic consumption.
The government is estimated to lose 240 billion baht worth of revenue from the VAT extension.
The Finance Ministry reported that collection of VAT in the first seven months (January-July) shrank 0.5% year-on-year, mainly due to slowing domestic consumption.