Fresh tax measures meant to spur private investment of 100 billion baht are scheduled to go before the cabinet for approval next Tuesday.
The committee on trade negotiation and investment approved a Finance Ministry proposal to offer a corporate income tax deduction of 2.5 times expenditure on machinery and a one-year tax exemption for importing machinery, said Finance Minister Uttama Savanayana.
The tax deduction applies to new machinery purchased from Jan 1 to Dec 31, 2020.
The measures are estimated to cost the government 9 billion baht in forgone tax revenue, Mr Uttama said.
The government is pushing the private sector to ramp up investment to shore up the struggling economy amid global economic uncertainties and a potential further delay in the 3.2-trillion-baht annual budget bill for fiscal 2020.
Additionally, several specialised financial institutions are offering business operators loans for machinery purchases, Mr Uttama said.
Deputy Prime Minister Somkid Jatusripitak, who on Thursday chaired the meeting of the committee on trade negotiation and investment, said the new tax incentives will be more enticing and generous than previous ones introduced in 2018. Those allowed private companies to deduct expenses on new machinery, equipment, furniture, computer software, commercial vehicles and buildings from taxable income at a rate of 1.5 times.
The Board of Investment (BoI) is also scheduled to meet early next month to introduce additional measures to boost investment, including those to be offered to parent companies of Thai firms that decide to invest in local areas and support small-scale companies.
The government pledges to amend regulations to relax the use of the 10-billion-baht Competitiveness Fund to support private investment.
The BoI and the Finance Ministry will also organise more roadshows to boost investment in various countries such as India and Japan, while the State Enterprise Policy Office will accelerate the disbursement of investment budget in fiscal 2020 among state-owned enterprises, amounting to 365.55 billion baht.
Investment forums among state-owned enterprises will be organised to support the investment climate.
According to Mr Somkid, the Transport Ministry, for instance, agreed to accelerate infrastructure projects such as the Orange Line's western section, which will stretch from Thailand Cultural Centre to Bang Khun Non on the outskirts of Thon Buri.
The development project is likely to be proposed to the cabinet for approval soon, now that the Transport Ministry has submitted the proposal to the secretariat of the cabinet.
Mr Somkid said the Eastern Economic Corridor is required to speed up setting the terms of reference for smart cities and a maintenance, repair and overhaul (MRO) centre within 1-2 months.
He is also due to meet high-ranking officials of the National Broadcasting and Telecommunications Commission and executives of telecom companies next Monday in a move to accelerate the 5G licence auctions.
"The government needs to accelerate investment by private and state-owned enterprises as fast as possible to boost the economy to help offset the sluggish world economy and delayed implementation of the fiscal 2020 budget," Mr Somkid said.
He said the International Trade Policy Committee will also be organised soon to consider Thailand's stance on participating in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Thailand-Hong Kong Free Trade Agreement.