Government to increase R&D funding, tariffs cut on IT goods
The Thai government said last week it will increase funding for research and development in five industries: agriculture and food, digital, medical and wellness, smart devices, and creative economy, as the Customs Department announced it will lower import tariffs on 524 information technology (IT) products with the goal of increasing the country’s competitive edge.
The National Innovation Policy Committee chaired by Prime Minister Prayut Chan-o-cha agreed to use money from several funds devoted to national competitiveness, the digital economy and business incubation to support research and development initiatives in the five industries, at the request of Minister of Commerce Suvit Maesincee.
“The government has been improving measures, be it through Board of Investment privileges or incentives from the Finance Ministry and other state agencies, to support private sector spending on R&D,” Suvit said.
The Board of Investment has adopted a new strategy in recent years that rewards companies that invest in high-technology, innovative or green industries, as opposed to previous incentive plans that rewarded firms for investing in less developed regions of the country.
Suvit said that the government would ask 27 Thai universities and the private sector to invest more in research and development as part of a national push to make Thailand a more high-technology country.
Thailand’s spending on R&D lags behind more advanced nations, but the government wants to correct that. The government’s target is to raise spending on research and development to 2 percent of gross domestic product (GDP) in 20 years, Suvit said. Such spending amounts to only 0.5 percent of GDP or $1.7 billion baht now, evenly split between the government and private sector.
As part of the push to promote higher-technology, the Customs Department announced that it has slashed tariffs on 524 information technology products, ranging from GPS devices to touch screens to next-generation semiconductors.
Although the revenue foregone from the tariff cuts will cost the Department an estimated $136 million this year, Department officials said they are still confident they can achieve their revenue target of $3.2 billion through tighter measures to prevent tax avoidance.
The department is launching a one-stop service to link information with other state agencies tasked with issuing licenses for importing products to facilitate trade.
In addition, the Department is in the process of installing a new software system that will give officials greater access to price information in order to reduce the amount of times they must use their own judgment to decide upon the value of items being inspected for duties or tariffs. This should reduce human error, Department officials said, and ease complaints and disputes.
The new software system will be piloted for trial later this year at two main ports and on over 100 items, and gradually expanded and then adopted nationwide and for all items should it prove to be effective.