August 30, 2024
BANGKOK – The Ministry of Finance is accelerating efforts to reduce various tax rates to make Thailand increasingly attractive to investors.
Delivering a speech at Thailand Focus 2024 organised by the Stock Exchange of Thailand on Wednesday, Deputy Minister of Finance Phaophum Rojanasakul said that in recent years Thailand’s economic growth had been below its potential due to complex pressures. Despite these challenges, Thailand’s economy still shows potential for recovery and growth, he added.
“The government is ready to offer suitable and diverse incentives, both fiscal and non-fiscal, and prepare the ecosystem to attract new investments in eight target industries: tourism, medical and health, food, aviation, transportation, future automotive, digital, and finance,” he said.
This is supported by a report from the Board of Investment (BOI), showing a 64% increase in investment promotion applications in the first six months of this year compared to the same period last year, particularly in target industries such as electronics, automotive, and data centres.
Regarding the vision of becoming a Financial Hub, he said the ministry was considering two main issues to attract foreign investment by offering various incentives, including tax benefits such as income tax and corporate tax.
The goal is to make Thailand a competitive financial hub when compared with other countries. Incentives will also include non-tax benefits such as ease of entry, visa options, benefits for incoming labour, and advantages for operating in different areas.
Both aspects need to be coordinated, with a particular focus on developing the country’s financial ecosystem to attract foreign investment.
“Tax incentives must be attractive and appropriately adjusted. Reducing various tax rates to attract investors is a good option to ensure that businesses and incoming labour receive tax benefits.
However, tax rate adjustments are not the only factor; other elements of the ecosystem must also be developed. Therefore, the Ministry of Finance is working on two fronts: adjusting tax rates and developing the ecosystem. The government is open to considering ideas from all parties,” he said.
The ministry has established a large working committee for the Financial Hub project. The next step is to expedite the drafting of new financial legislation, which is expected to be completed in about two months.