BANGKOK -- Thailand will deploy targeted tax cuts to encourage investment in face masks and other crucial items that are in short supply due to the coronavirus outbreak, the country's Board of Investment said on Monday.
A 50% corporate income tax cut lasting three years will be available for projects that involve the manufacturing of medical devices, diagnostic test kits, pharmaceuticals or mask materials.
The reduction covers projects applying for governmental approval during the first half of 2020, and which start production by year-end. The cuts apply in addition to the existing three- to eight-year tax exemption.
In addition, equipment imported into Thailand this year for producing medical devices will be exempt from tariffs.
Though the incentives address an immediate need, they also align with Bangkok's goal of turning the country into a hub for Southeast Asia's medical industry.
The measures "aim to enable a rapid response to the situation, while paving the way for longer-term development," said Duangjai Asawachintachit, secretary general of the Board of Investment.
Thailand also will offer incentives for production of raw materials, such as an eight-year corporate tax exemption for pharmaceutical-grade alcohol. The exemption for manufacturing nonwoven fabric used in masks or medical devices will be extended to five years from three.
The board released data Monday on foreign direct investment showing a 67% year-on-year drop to 27.43 billion baht ($842 million) for the January-March quarter. Japan led the list of investment sources, followed by mainland China and Hong Kong.