Board of Investment adds incentives for medical equipment
Thailand’s Board of Investment approved more privileges and incentives last week to encourage the rapid manufacture of medical equipment, already a priority industry under the Kingdom’s advanced development plan.
The new incentives were part of the response to the coronavirus pandemic, which has left many countries scouring the globe for medical equipment and supplies. The pandemic has spotlighted the limited stockpiles of ventilators, test kits, personal protective equipment, and other vital items.
“The measures for the medical sector 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 (BoI).
Although Thailand is a significant producer of all varieties of medical equipment and has a strong public health sector, the surge in demand because of the pandemic has left many countries in desperate circumstances.
The measure approved by the BoI to accelerate investments in the medical sector were as follows:
First: Apart from the 3 to 8 year tax holidays, a reduction of 50 percent of corporate income tax for an additional three years will be given to qualified investments in the medical sector. Examples include the production of medical devices and parts, non-woven fabric used as raw materials in the production of medical supplies, diagnostic test kits, drugs, and active pharmaceutical ingredients.
This measure covers projects that apply for promotion between January 1 and June 30, 2020, and must start production and generate income by December 31, 2020. Distribution or donation domestically of at least 50 percent of the output must take place in 2020-2021.
Second: A measure to support the adjustment of existing production lines to manufacture medical devices or parts by exempting import duties on machinery on the condition the equipment is imported within 2020, and the application for production line adjustment is filed by September 2020.
Third: Adjustments to the benefits granted for the production of raw materials used in the manufacture of medical products to encourage a more complete value chain in Thailand. For instance, pharmaceutical grade alcohol production can now be entitled to an 8-year corporate income tax exemption. Additional benefits will also be granted for the production of non-woven fabric used as raw materials for the production of medical masks or medical devices, by expanding the corporate income tax exemption to 5 years, from 3 years.
“In face of the unprecedented situation resulting from the virus outbreak, we have taken a range of measures to address the urgent needs of affected business sectors,” Duangjai added.
The full range of measures can be found at https://www.boi.go.th