Special incentives scheduled for six growth industries

Special incentives scheduled for six growth industries

The Finance Ministry plans to establish a fund to offer additional investment incentives from Board of Investment privileges to six industries, believed to be the country's new growth engines.

The fund concept must be completed by next week before being forwarded to Deputy Prime Minister Somkid Jatusripitak for consideration, finance permanent secretary Somchai Sujjapongse said yesterday after a meeting chaired by Finance Minister Apisak Tantivorawong.

The six industries include biofuel, logistics and robotics.

The government is launching a wave of privileges to solicit specific industry investment considered essential to driving the country towards an S-shaped growth curve.

Thailand has used cheap labour to attract foreign direct investment and drive economic growth for more than 20 years, but that tactic is drying up, with FDI and growth waning in recent years.

Other countries including Singapore have such funds to offer more attractive investment incentives, he said, adding that the fund could offer soft loans to the targeted industries.

In related news, Mr Somchai estimates the government's policy to push for a single account for SMEs and adoption of an electronic payment system will raise tax revenue by 100 billion baht.

If both systems are implemented, it will discourage tax avoidance and could reduce the government's need to increase value-added tax from 7%, he said.

Government revenue for the first month of fiscal 2015 missed the target by 2 billion baht. The fiscal year starts on Oct 1.

Meanwhile, the cabinet yesterday approved an extension for another year of the seven-rate personal income tax bracket, which was due to expire at year-end.

Mr Apisak said the cabinet considered the extension necessary to ease taxpayers' financial burden, given the weak economy.

The ministry wants to cut the maximum personal income tax rate as well as deductions and allowances and pass a housing and land tax as dictated by Mr Somkid.

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