The Kingdom is encouraging foreign car manufacturers to set up factories and use locally sourced parts to develop its status as a regional hub by September.
The Thai Ministry of Finance plans to introduce a package of tax incentives by September 2024, designed to encourage foreign car manufacturers to establish production facilities in the Kingdom and make active use of locally produced components. This initiative aims to strengthen Thailand’s position as a regional automotive hub and to develop high-tech industries.
According to Finance Minister Etkniti Nithithanprapas, a key aspect of this measure is providing tax incentives. Companies that set up factories in Thailand and use parts manufactured by local suppliers will benefit from reduced excise duty rates. At the same time, importers of fully assembled vehicles without a manufacturing base in the country will face higher tax rates.
The incentive scheme covers virtually all vehicle categories. The Thai Cabinet is expected to approve this proposal as early as next month. The main objectives of the initiative are to facilitate the transfer of technology to Thai engineers and workers, and to support long-term growth in household incomes.
The proposed tax measures form part of the government’s ‘New Horizon for Thailand’ strategy, which aims to attract foreign investment, particularly against the backdrop of current geopolitical tensions that are forcing many companies to review and diversify their production bases. This strategy is designed to ensure that Thai citizens have access to new economic opportunities and benefit from the inflow of capital.
Mr Etkni Thiitithanprapas also noted that Thailand’s economic growth potential before the 1997 Asian financial crisis stood at around 5 per cent of GDP annually, but after the crisis it fell to approximately 2 per cent. During this period, private and public investment fell from 40 per cent to 32 per cent of GDP. The Thai Government has set an ambitious target of increasing annual economic growth to more than 3 per cent over the next four years and raising total investment to 30 per cent of GDP.
Foreign investors are increasingly choosing Thailand because of its well-developed infrastructure, extensive trade links, and a stable political environment that ensures a secure business climate. The country is actively focused on attracting investment in high-tech sectors such as robotics, electric vehicle manufacturing, semiconductors and artificial intelligence. This comprehensive approach demonstrates Thailand’s commitment to modernising its economy and becoming a regional leader in innovative industries.
Read More Articles Here
Read More Articles Here
