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Thailand plans tax measures to spur investment: finance minister
[BANGKOK] Thailand's finance minister on Monday said he expected to propose tax incentives to the cabinet over the next two weeks aimed at boosting private investment this year and next, as the military government seeks to revive flagging economic growth.
With exports and domestic demand still sluggish, Southeast Asia's second-largest economy has yet to regain traction since the army seized power in May 2014 to end months of political unrest. The junta has focused on driving investment.
The tax benefits will help speed private investment before large public infrastructure projects kick off next year, Finance Minister Apisak Tantivorawong told reporters. "Money will be added to the system steadily until there is investment in mega projects next year," he said. "There won't be the gap that makes (people) feel the economy is getting worse." The tax benefits will also be for building, machinery, computers and cars, Apisak said, without giving further details.
The measures should encourage firms to improve productivity to compete with other countries, as a lack of investment in Thailand over the past 10 years had made many Thai goods outdated and less competitive, he added.
The government will later consider measures to promote new industries, which will strengthen Thailand's fundamentals over the next 10 to 20 years, Apisak said.
In a bid to lift the economy, the government recently approved stimulus packages, aimed at supporting rural areas, smaller firms and the property sector.
Last month, the Board of Investment also offered tax benefits for private investment applications this year and next, with actual investment needed by the end of 2017.
The economy grew just 0.9 percent last year, the weakest since flood-hit 2011. For 2015, the Finance Ministry expects growth of 2.8 percent.