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INVESTMENT PROMOTION: BoI criteria set to cut imports

Privileges to focus on local content use
by Chatrudee Theparat

Investment promotion privileges will be granted in the future based on local content use, technological development and value creation, according to Prime Minister Thaksin Shinawatra. Mr Thaksin said the new criteria was part of the government’s efforts to reduce imports and restructure investment promotion policies in the face of the changing world economy.

“It’s a new dimension for promotion to supplement the existing one,” he said.

Previously, the Board of Investment screened investment applications using a geographic zone system. Projects located in zone three, covering the poorest provinces of the country, enjoyed maximum privileges, including corporate tax and import tariff reductions.

The BoI and the National Economic and Social Development Board plan to finalise details of the new policy and the industries targeted at a later date. “Both agencies should focus their discussion on the ways to promote machinery and raw material production, to substitute for costly imports,” said Mr Thaksin.He said the new policy would not violate trade commitments under the World Trade Organisation, and was aimed at matching the country’s present and future development needs.

Staporn Kavitanon, BoI secretary-general, said the government’s main concern was focused on cutting imports. Promotion privileges extended to projects using higher local content through the BoI Unit for Industrial Linkage Development (BUILD) programme. As of last April, BUILD successfully supported promoted projects in using local materials worth 3.79 billion baht.

According to the Finance Ministry, total imports were worth 2.5 trillion baht in 2000, of which 1.8 trillion baht were exempt from duties due to BoI promotions and tariff  measures by the Customs Department, bonded warehouse, export processing zone and other programmes. Imports receiving BoI tariff discounts were worth 830 billion baht last year, or 33% of totalimport value, and covered a wide range of industries. 

Bangkok Post, April 10, 2001

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