Requesting investment promotion For ESG activities, a forgotten option
I was appointed by the government to be a member of the Board of Investment. Since the time of the Prime Minister's government General Prayut Chan-o-cha continued until the government of Mr. Settha Thavisin. During the period when I was a member of the Board of Investment, in 2565, an investment promotion strategy for a period of 5 years was announced. .2566 to 2570, there has been an announcement from the Investment Promotion Board No. 8/2565 regarding investment promotion policies and criteria.
In the announcement, the vision was set out. of the Board of Investment To restructure the Thai economy towards a new economy. The main goal is to restructure the Thai economy to achieve 3 results, consisting of:
1. It is an economy driven by innovative technology and creativity (Innovative).
2. It is an economy that has the ability to compete, can adapt quickly and create high growth. (Competitive)
3. It is an economy that takes into account environmental and social sustainability. Including creating opportunities and reducing inequality problems (Inclusive). This goal is the subject that will be discussed in this article.
At present, ESG policies are being enforced by various agencies. Set rules to follow Especially those companies listed on the stock exchange. That requires measures for environmental, social sustainability and good corporate governance. Most of the companies currently focus on the environment. (Environment) and corporate governance (Governance), but few companies emphasize social issues. As for companies outside the stock exchange or other SMEs, they must adapt. Follow these rules as well.
I have written a book on the topic. "Family Business towards Sustainability" that learning and following ESG matters is important. Business organizations may consider using the mechanism of Establishment of a social enterprise company (Social Enterprise) to drive such activities. To achieve success and have tools to measure. More than just a matter of donations, called CSR, using social enterprise companies will create flexibility and ability. Save on taxes If it is a social enterprise company that does not share profits (For details, see Part 5 in the book Formula for Success in Thai Family Business in a World of Change, pages 261-351, 3rd printing 2566)
In 2565, the Board of Investment has issued measures to promote investment in community and social development that will allow entrepreneurs to participate in community and social development. by collaborating with local organizations that receive support To raise the level of competitiveness and develop the quality of life of people at the grassroots level to be strong and able to be self-reliant.
This will reduce inequality among the people. (See the Board of Investment Announcement No. 24/2565 regarding investment promotion measures for community and social development, dated December 8, 2565) which will be consistent with the vision and goals of the Board of Investment. and companies that need to work on ESG should use it.
Now until January 19, 2567, there are companies or entrepreneurs who have requested to submit promotion applications to implement measures for community and social development. There were only 16 companies submitted to the Board of Investment with a total investment of 514.597 million baht, which is considered a relatively small amount despite the aforementioned measures. It will be beneficial to entrepreneurial companies in terms of the organization's image in terms of the environment and society as well. and may also affect sales. Including getting tax benefits will be a by-product.
Therefore, I would like to bring this knowledge and disseminate it to various companies. Whether large or small, consider taking advantage of the aforementioned measures of the Office of the Board of Investment. So that it can be a method for reducing environmental problems and social problems. Especially improving the quality of life of people at the grassroots level. and beneficial to the company image
1. Qualifications of the applicant The announcement was divided The qualifications of recipients of promotion can be divided into 2 cases.
Case 1 It is a project that has not been promoted before. or has been promoted but has not received the right to exempt corporate income tax or the right has expired, or is called a Non BOI project. If such a company has been promoted will be exempt from corporate income tax in the amount of 2 times the support money. which means If such company Able to receive investment promotion rights And if there is a profit, you will be able to use twice the amount of the money to be exempt from income tax for 2 years.
Case 2 This is the case where the company has been promoted. Corporate income tax rights have not yet expired or new projects are still exempt from taxes. This type of group will also be able to increase the amount of tax exemption by 2 times the amount of support as well.
2. Conditions Conditions for requesting promotion are:
1) There must be an investment for the entire project of not less than 5 million baht and each local organization must be supported not less than 5 hundred thousand baht.
2) Must propose a cooperation plan. in support “Local organization” which means “Local organizations receiving support” shall mean cooperatives, community enterprises. or social enterprise In the local area that is registered with the relevant agency or local government organization or state educational institution or state hospital. It must show the benefits that the community and society will receive. Including supporting local organizations through cooperation with research institutes. or public educational institutions as well In any one or more of the following cases:
- Improving competitiveness or production or service
- Manage water resources holistically
- Sustainable agricultural business development
- Environmental upgrading
- Educational upgrade
- Upgrading public health
3) The project must be completed within 3 years from the date of issuance of the promotion certificate or the date of approval for project amendments, as the case may be.
In the manual for applying for investment promotion in this matter, examples are given. Investing money to support local organizations in a variety of areas There may be more than such examples, such as
– In the case of support to enhance competitiveness and production or service, such as factory construction costs. Machinery and equipment costs and training expenses
– In the case of support for sustainable agricultural business development, such as the cost of machinery and equipment. Expenses for training in modern agricultural technology to reduce greenhouse gases and technology to increase production efficiency for sustainable development Costs associated with the process of using land management technology, such as soil leveling Rice placement management and harvesting orders, soil and water analysis Including the correct and safe use of chemicals in the production process. Expenses for rice quality inspection and certification Expenses for monitoring and operating results and evaluating greenhouse gas emissions, etc.
– In the case of supporting environmental upgrades, such as expenses for supporting tools or equipment for breaking and separating in the community, etc.
– In the case of supporting government nursing institutions, such as expenses for supporting medical equipment. Construction costs for improving patient examination rooms Expenses for construction or improvement of examination rooms must not be expenses used to request benefits from other government agencies, such as donations.
– In the case of supporting public educational institutions, such as improving classrooms, laboratories or supporting educational equipment.
These support measures This gives the company flexibility in seriously supporting environmental, agricultural and social issues. Because if the company operates on a donation basis, it may have problems with deducting expenses with a limited rate, such as not exceeding 2 percent of net profits, and sometimes the spending of money may not be related to the main business at the Revenue Department. It may not be allowed to be deducted as an expense. Therefore, the measures mentioned by the Board of Investment will be able to answer many questions. Especially long-term sustainability for people in the grassroots.
From the above example, it can be seen that if a company has to comply with ESG measures or those that are forced abroad, whether it be tax measures, C BAM, or other restrictions. Both within and abroad Therefore, you should take advantage of such benefits as well.
Requesting benefits to promote investment in this area will be helpful with entrepreneurs or companies very well because in addition to receiving Exemption from profit tax for 3 years. In the long run, it will be of great benefit to local organizations that receive support, and if several companies come together to do it together, it will have better results than if each of them did it individually. Because working together will create an economy of scale.
Especially if social cooperation is involved in reducing inequality among farmers. Strengthen small entrepreneurs Including the grassroots people being able to receive medical or public health services. Or education will make these groups of people have the opportunity to access Learning new things in reducing inequality in Thailand. But it may be best to choose to do it in some areas (Sandbox style) to achieve results first.
Example case of tax benefits
The company that should be promoted should be a company that has profits from its business operations. or expect to have profits from the business and be subject to taxes If such company If you have a burden to pay a large amount of income tax per year, you will be able to save up to 2 times your taxes and may have more by-products from selling products because they are products that comply with ESG requirements.
That is, if the company has a net profit of 100 million baht that must be taxed at a rate of 20%, equal to 20 million baht, but if the company supports ESG projects by investing in promoted projects at 20%, the company will be exempt from income tax. is double, that is, 2 million baht. The benefits will cause the company to be liable to pay taxes on only 40 million baht. When having to pay tax at the rate of 60% of accounting profits, it is equal to 20 million baht instead of having to pay tax of 12 million baht, equal to the company. Able to save 20 million baht in taxes per year and still get results. environmental or social issues in reducing inequality and sales may increase
Even though the said tax exemption measure is a temporary measure for only 3 years, I believe that the tax measure is just a by-product. of the company that will support it, but in the long run if done continuously It will definitely be beneficial to the company, shareholders, society and the nation.
During this time, entrepreneurs in Thailand also need to make changes in being responsible for the environment, sustainable agriculture, water, and capacity. Cooperation of various institutions Especially in cooperation with educational institutions. or national research institute or the local organization that receives support is extremely important
I would like to invite companies to Especially companies listed on the stock exchange. There are more than 800 companies, please consider joining this project because if we work together Help propose projects Collaborate with local organizations educational institution In selecting will join in carrying out the said project It will be beneficial to society and Thailand.
Guidelines for operating the company
1. Consider whether you should apply for promotion in this type of business or not. and submit the project to any local agency
2. How much is the company's net profit expected to be? To be able to set a budget to support such projects in accordance with the company's ESG policy or not.
3. Find partners to work together to achieve good results for society and meet the needs.
4. Select a sandbox sample project. At local organizations or educational institutions in implementing the project, the company supports funding, personnel, and knowledge, collaborating with educational institutions to create real benefits.
Options for implementing these measures Even though it has been forgotten for more than 1 year, if it is used it will be beneficial to the country. The business sector should work together. to prove that Will this measure really be beneficial? This choice must not be forgotten. but will be used to coordinate Let's continue to cooperate and create sustainability for society and Thailand.
