A meagre 49 startups are entitled to a five-year corporate tax holiday offered to those engaged in the government's 10 targeted industries and ready to conduct business this year, says a senior official at the Finance Ministry.
Given the small number of startups enjoying the tax privilege, the ministry has requested the cabinet extend the incentive for another one year to Dec 31, 2018, said Finance Ministry spokeswoman Kulaya Tantitemit.
According to the criteria, those who set up a business in a next-generation industry from Jan 1 to Dec 31, 2017 are exempt from corporate income tax for five years. To be eligible for the tax holiday, they must be certified by the National Science and Technology Development Agency (NSTDA).
The government's targeted industries are next-generation cars, smart electronics, affluent medical and wellness tourism, agriculture and biotechnology, food, robotics for industry, logistics and aviation, biofuels and biochemicals, digital, and medical services.
Ms Kulaya said 32 of the 49 startups entitled to the tax exemption had requested the tax incentive, while the others might not be generating enough income to pay a tax bill.
Those who are entitled to the tax holiday can hold onto the privilege and use it when their businesses are liable to pay income tax, she said.
A source at the ministry said the regulations required by NSTDA may be too tough and the committee to verify startups may not meet often enough, potentially leading to few firms qualifying for the tax holiday.
To qualify for the five-year tax holiday in 2018, startups must have paid-up capital of less than 5 million baht, earn up to 30 million in annual income and register the business from Jan 1 to Dec 31, 2018. At least 80% of income must be contributed by one of the 10 targeted industries.
