The measures include a corporate income tax deduction of 2.5 times expenditure on machinery, a one-year tax exemption for importing new machinery, and special-rate loans offered by the Export-Import Bank of Thailand for exporters to alter their machinery for export.
The tax measures apply to new machinery purchased from Jan 1 to Dec 31, 2020. The 2.5-time tax deduction is not applicable to leased machinery.
The measures are estimated to cost the government THB8.6 billion in forgone tax revenue, said Narumon Pinyosinwat, a government spokeswoman.
According to Narumon, the cabinet has approved a THB350 million budget to compensate Exim Thailand for the special interest rates.
The Thai Finance Ministry said the fresh measures are essential to stimulate private investment and the local economy this year because of the uncertain global economy and the US-China trade war's impact on the export sector.
Another batch of investment stimulus measures initiated by the Board of Investment (BoI) will seek cabinet approval on February 6.
According to a report by the National Economic and Social Development Council, the country's private investment is forecast to grow by 4.2 percent in 2020, as compared with 2.8 percent in 2019, 3.9 percent in 2018 and 2.9 percent in 2017.