The government will slash by about 50% the personal income tax rate of professionals who are willing to return home to work for companies as the kingdom seeks to attract manpower for industries ranging from electronics, automobiles, robotics and aviation.
The cabinet approved the tax breaks on Tuesday to lure “the cream” of overseas Thai workers, Deputy Finance Minister Paopoom Rojanasakul told reporters.
Qualified Thais returning to their homeland will be required to pay personal income tax at a maximum of 17% for five years, Mr Paopoom said. That compares with the top 35% rate for residents who earn 5 million baht or more annually.
Prime Minister Srettha Thavisin, who came to office nearly a year ago after nearly a decade of military-backed rule, is under pressure to revive Southeast Asia’s second-largest economy that has lagged the expansion of its neighbours.
He has aggressively pitched Thailand as an investment and travel hub, yet the country has battled a shortage of professionals in high-tech manufacturing and services, including the all-important tourism industry.
Neighbouring Indonesia, which is similarly courting foreign investments, has also stepped up plans to halt the exodus of local talent and lure its migrants back home and bolster the pool of skilled workers. Both countries have also offered special visas targeting digital nomads.
In Thailand, companies that employ returning Thais under the latest programme will be allowed to deduct 1.5 times their expenses of hiring them, according to Mr Paopoom. The perks will be effective until the end of 2029, he said.
The minister did not go into detail about which industries would be eligible for the incentives.
Thai nationals seeking to qualify for the inventives must have worked overseas for at least two years and must have at least bachelor’s degree. Registrations will be open until Dec 31, 2025, according to Mr Paopoom.
Eligible workers must return to Thailand from when the law takes effect but no later than 2025, and be employed under labour contracts in target industries.
During the tax year, they must stay in Thailand for at least 180 days.
“We want to bring them back to help develop the Thai economy and select industries,” the minister said. “The move will also help generate more tax revenue we haven’t got before” with the development of key industries, he added.
The government expects at least 500 professionals to take up the offer, which may lead to a tax revenue loss of about 120 million baht over five years, according to an official statement.
