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Thailand offers more tax benefits to speed up investment projects
[BANGKOK] Thailand approved on Tuesday more tax incentives to accelerate private investment this year and next, the finance minister said, as the military government tries to get a sluggish economy on track.
The army seized power in May 2014 to end months of political unrest but has struggled to revive Southeast Asia's second-largest economy, with exports and domestic demand weak. The junta has focused on driving investment.
The new incentives will cover general investment projects and those approved by the Board of Investment (BOI), Finance Minister Apisak Tantivorawong told reporters. "The measure, we believe, will spur more investments and faster," he said.
The benefits include a tax exemption for projects approved by the BOI from January 2014 to June 2016.
They will get the exemption for four more years if they have 70 per cent actual investment made by June next year, but together not more than eight years.
Projects without BOI privileges can have a tax deduction of two times their investment, including machinery, buildings and cars, if they invest this year and next.
In September, the BOI also offered tax benefits for private investment applications this year and next, with actual investment needed by the end of 2017.
The cabinet also slashed a lengthy process of public-private partnership (PPP) projects to just nine months from nearly two years before opening bids. "The government will use PPP projects to speed up Thailand's infrastructure," Apisak said, adding the new rule would be used with six infrastructure projects worth about 348 billion baht (S$13.7 billion).
The private sector welcomed the step. "If it can be sped up to only nine months, I think it will make investments in public infrastructure happen faster and that will benefit the country," Boontuck Wungcharoen, chairman of the Thai Bankers' Association, told reporters, referring to the faster PPP approvals. "These investments will keep the economy rolling faster." The economy grew just 0.9 per cent last year. For this year, the central bank predicts 2.7 per cent growth.