BANGKOK (Bloomberg): Thailand will slash by about 50% the personal income tax rate of professionals who are willing to return home to work for companies as the nation seeks to attract manpower for industries ranging from electronics, automobiles, robotics and aviation.
Prime Minister Srettha Thavisin’s cabinet approved the tax breaks on Tuesday to lure "the cream” of overseas Thai workers, Deputy Finance Minister Paopoom Rojanasakul told reporters.
Qualified Thais returning to their homeland will be required to pay a personal income tax of only 17% for five years, Paopoom said. That compares with the maximum 35% rate for residents who earn 5 million baht ($139,000) or more annually.
Srettha, who came to office nearly a year ago after nearly a decade of military-backed rule, is under pressure to revive Southeast Asia’s second-largest economy that has lagged the expansion of its neighbors. He has aggressively pitched Thailand as an investment and travel hub yet the nation has battled a shortage of professionals in high-tech manufacturing and services including the all-important tourism.
Neighboring Indonesia, which is similarly courting foreign investments, has also stepped up plans to halt the exodus of local talent and lure its migrants back home and bolster the nation’s pool of skilled labor. Both the nations have also offered special visas targeting digital nomads.
In Thailand, companies that employ returning Thais under the latest program will be allowed to deduct 1.5 times their expenses of hiring them, according to Paopoom. The perks will be effective until the end of 2029, he said.
To qualify for incentives, Thai nationals must have worked overseas for at least two years and must have a bachelor degree. The program will be open for sign-up until Dec. 31, 2025, according to Paopoom.
"We want to bring them back to help develop Thai economy and select industries,” the Thai minister said. "The move will also help generate more tax revenue we haven’t got before” with the development of key industries, he said.
The government expects at least 500 professionals to take up the offer, which may lead to a tax revenue loss of about 120 million baht over five years, according to an official statement.
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