Bangkok: Ekniti Nitithanprapas, Deputy Prime Minister and Minister of Finance, is set to propose a reduction in excise tax for automobile companies that establish factories in Thailand and utilize local supply chains. The proposal, aimed at enhancing the country's economic resilience and attracting foreign investment, also includes plans to levy taxes on goods that negatively impact small and medium-sized enterprises (SMEs).
According to Thai News Agency, Ekniti disclosed these strategies at the Fiscal Policy Office's annual symposium. He outlined the opportunities Thailand stands to gain amid global conflicts and economic crises by attracting foreign investment through enhanced domestic policies. The government's priority areas include upgrading income and labor skills, strengthening economic and energy resilience, adjusting investment strategies, and using tax measures to protect domestic businesses.
To elevate income and labor skills, the government intends to ensure access to jobs across all income levels, fostering technological advancements and artificial intelligence (AI) integration. Initiatives like the "Whispering Bird" project aim to aid small business owners in managing finances efficiently, reducing the need for accountants and lowering operational costs, thereby boosting access to funding from state-owned banks.
In enhancing economic resilience, Thailand plans to reduce its reliance on foreign energy imports by transitioning to clean energy solutions. This effort includes promoting policies like Direct Power Purchase Agreements (PPA) for clean energy and encouraging solar power installations to decrease household energy costs.
The Board of Investment (BOI) will revise incentives for foreign investment to mandate the use of domestic supply chains, a strategy that has previously succeeded in the automotive sector. The Ministry of Finance is preparing to offer tax incentives for modern vehicle manufacturers that establish local production facilities, while imposing higher taxes on imported vehicles. These measures are expected to be presented at a Cabinet meeting by September.
To protect Thai SMEs from the impact of cheap imported goods, the Customs Department and the Revenue Department have initiated tax collection measures, including Value Added Tax (VAT) and customs duties, from the first baht. This approach aims to ensure fair competition for Thai businesses and enhance government revenue.