BANGKOK: Thailand is preparing a package of tax, visa and property-related incentives to accelerate the U-Tapao Airport and Eastern Aviation City Development Project, with government agencies instructed to make the endorsed measures operational by Sept 30, 2026.
The Cabinet acknowledged the urgent support package on Tuesday (Aug 25), following its endorsement by the Eastern Economic Corridor Policy Committee, Deputy Government Spokesperson Lalida Perisvivatana said.
The measures are intended to create a more attractive investment environment around the airport, draw leading businesses and targeted industries into the area, and enable the wider aviation-city development to proceed more quickly.
The Eastern Economic Corridor Office of Thailand (EECO) estimates that the package could stimulate about THB1.3 trillion in private-sector investment within the project over its lifetime and create more than 63,701 jobs.
The project is a major infrastructure component of the Eastern Economic Corridor. EECO and U-Tapao International Aviation Co., Ltd. (UTA) signed the public-private partnership agreement on June 19, 2020.
One of the principal measures would allow businesses to deduct twice the amount of expenditure covered by the scheme when calculating corporate income tax.
The deductions would apply to qualifying capital expenditure, or CAPEX, and operating expenditure, or OPEX. Detailed eligibility criteria and implementation rules will still need to be issued.
Additional incentives could be considered for businesses that:
>employ highly skilled workers;
>use advanced technology or clean energy;
>transfer knowledge or technology; or
>invest heavily in assets used by designated special target industries.
The package also envisages allowing foreign personnel to reside, work or conduct business in the Eastern Airport City Special Economic Promotion Zone through a special non-immigrant EECa Visa.
Another measure would reduce the corporate income tax rate for businesses engaged specifically in international air transport.
The tax incentives would be granted in five-year periods. Their effectiveness and value for money would be assessed before any extension was considered.
Authorities are also considering reductions in registration fees for property leases and real-estate transfers within the development area.
Feasibility studies would examine the development of a cruise terminal, a yacht marina and feeder transport systems, as well as a possible expansion of the Eastern Airport City promotion zone.
The proposed infrastructure would connect U-Tapao Airport more closely with surrounding tourism, transport and investment activities.
The EEC Policy Committee also endorsed adjustments to some proposals to ensure that they complied with existing laws and could be implemented in practice.
These include possible tax and duty exemptions relating to consumption and business operations within the Free Trade Zone.
EECO will consult relevant agencies on rules governing the import, maintenance and storage of racing cars, classic cars and privately owned collectible vehicles. The consultations will also determine the controls needed for such activities.
EECO and other responsible agencies have been instructed to accelerate the necessary legislation, regulations and administrative work so that the measures can take practical effect by Sept 30.
The government said the package was intended not only to advance the airport project but also to create commercial activity across the surrounding aviation city.
EECO estimates that the development could attract approximately 400,000 additional foreign visitors a year once services begin and generate about THB20 billion in local spending.
The office also projects that the project could contribute more than THB37 billion to Thailand’s gross domestic product in its first year of operation, with its economic contribution increasing over the remainder of the project. - The Nation/ANN
