Fiscal measures facilitating special economic zones in the southern border provinces under the model city project: Stable, wealthy, and sustainable triangle

Abstract

The Southern Border Provinces Economic Triangle Project is a key government initiative aimed at revitalizing the economy and attracting investment from both domestic and international stakeholders. This article examines and analyzes the fiscal measures implemented to support the development of special economic zones in Thailand's southern border provinces, in line with the "Stable, Wealthy, and Sustainable Triangle" model city project. Analysis of the data reveals that the government, through the Board of Investment, has introduced a range of incentives to promote economic growth under this initiative. These include: 1) corporate income tax exemptions; 2) income tax reductions; 3) import duty exemptions on machinery; 4) import duty exemptions on raw materials intended for export; 5) reduced import duties on raw materials used for domestic production; 6) deductions for transportation, electricity, and water expenses; 7) deductions for facility installation and construction costs; and (8) permission to employ foreign labor. Despite these incentives, several factors have impeded the project's effective implementation. These include a lack of experience among implementing agencies, mismatches between investment incentives and investor needs, policy discontinuity due to changes in government, opposition from local groups, and regional instability. As a result, the application of fiscal measures to stimulate economic development in these areas remains a significant challenge.