Garment sector needs incentives for foreign investment

The President of the Thai Garment Manufacturers Associations (TGMA) – Sukij Kongpiyacharn said that Board of Investments (BoI) should transform its role from only managing overseas investment in Thailand to promote investment in foreign countries.

He added that companies which are investing in overseas countries must be exempted from the ambit of double taxation in order to encourage investment in foreign countries.
Mr Sukij also condemned the outdated laws of Thailand which are associated with the foreign business deals. As per these laws, domestic business which invest in the foreign countries are required to pay 30 percent corporate income tax in the country where the investment is made and another 30 percent in Thailand. In comparison to Thailand, Singapore, Malaysia as well as Hong Kong have much more favorable corporate income tax rules and therefore these countries have enormous foreign investments.
He added that only 30 to 40 companies from Thailand have made investments in foreign countries like China, Vietnam, Laos, Cambodia and Indonesia. The major challenges that are confronted by the garment manufacturer of Thailand include greater manufacturing costs due to the increase in the value of the home currency (baht) and higher wages in the domestic industries, has forced the manufacturers to think about foreign investments, particularly in the neighboring countries.

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