Speaking at a seminar held last week to define the new role of the Board of Investment, Prime Minister's Office Minister Chaturon Chaisaeng, who oversees the BOI, said that from the beginning of next year, the body would be scaling down its involvement in the granting of tax exemption privileges in order to adopt a more advisory role.
The move comes as most investment tax incentives are being removed in order to comply with World Trade Organisation free trade regulations. 'The office's plan to restructure its tax privilege system is expected to be finished and effectively implemented by the middle of next year at the latest,' he explained.
However, Mr Chaturon stressed that there was a need for a period of clarification regarding the forms of industrial investment to be phased out of the tax privilege system, and although it was agreed that new working guidelines for the Board of Investment are necessary, there was some confusion as to how to implement them, while at the same time ensuring that Thailand's budding industrial investment projects, most especially those in the electronics industry, are not harmed.
The Secretary General of the Board of Investment, Chakramol Phasukvanich, said at the meeting that the scaling down of tax exemption activities would focus more on income tax exemptions than on customs taxes for imported raw materials and production machinery, and stressed that there would still be plenty of incentives for investment on offer. 'Non-tax privileges such as the right to own land, the employment of specially skilled foreign staff, and permission to hold more than a 50% stake in a company are still attractive incentives to foreign investors,' he said.
Chaturon attempted to allay fears that the emerging electronics industry would relocate elsewhere in search of less stringent taxation regulations, by reassuring the assembly of both private and public sector representatives that the Board of Investment would still consider tax exemption requests on a case by case basis, if the Thai government considers that they are essential to promoting investment.
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