BANGKOK—Thailand Wednesday approved a new tax incentive to stimulate investment in the country’s industrial heartland, which was badly hit by last year’s floods, Industry Minister Pongsavas Savasti said.
The Board of Investment agreed to waive corporate income tax for eight years at 150 percent of investment value for all new and extended investment in Pathumthani and Ayutthaya provinces, which were badly affected by the disaster.
“We want to see Pathumthani and Ayutthaya still the center of investment,” said Pongsavas.
The months-long floods took a heavy toll on the industrial areas north of Bangkok, with many factories forced to close temporarily, including Honda’s Ayutthaya plant.
The tax incentive comes amid a government charm offensive to reassure investors that the kingdom remains a good place to do business.
A recent survey showed almost one in 10 Japanese manufacturers with operations in Thailand plans to relocate out of the kingdom but Pongsavas said he was not worried about investors leaving.
“I don’t have any worry at all or maybe only less than one percent of foreign investors will move their investment base to other countries because of the flood. Those who moved (from flood-hit areas), they are still in Thailand,” said Pongsavas.
Tariffs would also be waived on imports of new machinery or equipment under 10 years old for new or expanded projects or to replace flood-damaged machines.
The board also gave the green light to support 11 new projects worth 83.8 billion baht ($2.7 billion), mostly electricity production projects in Ayutthaya and Pathumthani.
Japan remains the top investor to apply for investment support from the Board of Investment during the first two months of 2012, followed by investors from the United States.