Thailand pushes for 5-year factory fee exemption to drive Deep South growth

The Ministry of Industry is set to propose extending factory fee exemptions in Thailand's southern border provinces for another five years to boost economic growth and attract investment, Industry Minister Varawut Silpa-archa said ahead of the mobile Cabinet meeting on Tuesday.

The proposed policy will extend fee waivers for businesses operating across Narathiwat, Pattani and Yala, as well as the districts of Chana, Thepha, Na Thawi, and Saba Yoi in Songkhla. The measure will apply retroactively to June 20, 2026.

The tax relief covers various operational expenses, including licensing fees for setting up or expanding factories, permit transfers, machinery adjustments, facility expansions and annual operating charges.

Varawut emphasised that the move aims to reduce production costs, retain existing manufacturers and incentivise new investments, ultimately fostering job creation and long-term economic stability in the Deep South.

683 factories are expected to benefit from the tax relief, a significant jump from 119 factories in 2021, reflecting the strategy's success in stimulating regional activity.

The beneficiaries comprise 666 Category 3 factories, which require prior approval before operation, and 17 Category 2 factories, which require prior notification, together supporting around 15,000 jobs.

Although the extension is projected to cost the government approximately 13.28 million baht in foregone revenue, the minister maintained that reducing financial burdens for businesses offers far greater economic returns through sustained employment and industrial growth.

Acknowledging the unique security and socio-economic challenges in the southern border provinces, Varawut reassured business leaders that the government remains committed to supporting local enterprises and maintaining investor confidence in the region.