BOI promotions for EEC include 50 percent corporate income tax reduction

The Consumer Confidence index (CCI) rose for the fourth consecutive month in March to the highest point in two years. The University of Thai Chamber of Commerce Economic and Business Forecasting Center reported that the consumer confidence index rose to 76.8 last month due to export growth, tourism and higher prices for para rubber and oil palm. The Business Sentiment Index also rose in March to a 24 month high to 52.6 from 49.8 in February in large part due to a rise in exports. Although farm prices remain low the Center forecasts this year’s growth to 3.6 percent and see exports growing about 2 – 3 percent while inflation will stay at around 1.6 – 2 percent. The Bank of Thailand sets this year’s growth at 3.4 percent and 3.6 percent while they see inflation at 1.2 percent this year and 1.9 percent next year. The BoT reported that private consumption and purchasing power is expected to grow and household debt is expected to fall as most people will have finished paying off the loans taken under the first car buyer incentive scheme. Private investment is reviving in the alternative energy, telecommunications, and electronics sectors.

The Board of Investment (BOI) announced a new 50 percent cut in corporate income tax for companies investing in the Eastern Economic Corridor (EEC) last week. The 50 percent cut will be for 5 years for companies investing in targeted industries in the EEC. Those industries include biotechnology, nanotechnology, advanced materials technology, digital technology, and enabling services.  The new incentives are added to the 17 percent flat tax rate for executives, experts and researchers who work for companies investing in targeted industries and headquartered in the EEC. Materials used in research and development for hemical substances, prototypes, animals and plants have been given an import tariff waiver while investors will be able to claim a 300 percent deduction for R&D expenses if they invest in technological or human resource development.

The government continues plans to develop U-Tapao Airport by designating 6,500 rai around the airport as a special investment promotion zone on aviation covering aircraft-related business, air cargo and warehouses that will be open for 100 percent foreign investment. The government also approved the budget for a second runway and a public-private partnership for the airport’s second terminal. The second terminal is scheduled to be finished in five years and will increase the airport’s capacity to 15 million passengers, up from the current 3 million. The Royal Thai Navy, Thai Airways International and the Civil Aviation Training Center signed a memorandum of understanding with the government develop and aircraft maintenance center and on air freight and logistics development.

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