The Thai government has decided to postpone the proposed VAT hike planned for next year due to expected economic hardship for people. The government will look to other sources for the necessary funds for water management and infrastructure projects. The government is looking at promotion of trade and investment via the establishing of special economic zones to create more income and the promotion of rubber processing. The government is also looking to promote tourism by creating five clusters of provinces that are each linked to one of Thailand’s neighboring countries.

 

The Finance Ministry predicts that the Thai GDP will grow by 4% next year mainly due to government investment in exports, industry and infrastructure but warns that there will be increasing fluctuation in monetary and capital markets in the country. Dollar appreciation is expected to take place next year as the U.S. economy continues to improve and European countries, Japan and China will ease their monetary policies to handle their weak economies which should see the Thai baht rise against the Yen and the Euro.

 

Thailand is joining a World Trade Organization organized free trade discussion with 26 other countries to export technological product parts overseas without tariffs. This is the second phase of the negotiations, the first phase having taken place in 1996 which saw import tariffs exempted for almost all of the products from Thailand, leading to a significant increase in IT technology investment value. Other countries taking part in the negotiations include the United States, the European Union, China, South Korea and Japan among many others. Thailand hopes to keep its pre-eminent place as a source of reliable base for technological manufacturing.

 

The Board of Investment (BOI) approved 23 projects with a combined value over 79 billion baht last week. They included applications for the second phase of the government’s eco-car project by Toyota, Honda, Suzuki and a joint project between Chinese manufacturer SAIC and CP Group that will invest more than 34 billion baht in producing vehicles and parts. The BOI also approved a new investment strategy for 2015 – 2021 including tax incentives for factories to be set up in five special economic zones. The Cabinet also approved new tax privileges for companies that set up their international headquarters or international trading centers in Thailand including cuts and waivers of corporate income tax, personal income tax, specific business tax and withholding tax as well as other non-tax measures. State agencies have been assigned to improve visa and work permit applications and to set up a one stop center for them.

 

AirAsia has expanded its Redbox Delivery Service to Thailand, promising to offer delivery rates of 50% lower than other carriers for delivery in Singapore, Malaysia, Indonesia, the Philippines, Vietnam and Nepal. The company plans on expanding into Australia, Japan, China and Hong Kong. Redbox has over 300 kiosks and will also offer pickup service of items for delivery. AirAsia attributed second quarter growth in revenue of 5% year-on-year to 1% growth in passenger numbers. Capacity increased 1% with load factor remaining steady at 80%, in line with the carrier’s target.

 

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