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The Thai government last week approved in principle a move to dispense with taxes laid on foreign acting talent. The move is intended to further increase the attractiveness of the country for film and TV productions.

Thailand currently offers foreign films shooting in the country a cash rebate of 15-20% of the expenses incurred in the country, with the ceiling per production fixed at THB 75 million baht ($2.12 million).

But under current rules Thailand also imposes withholding tax on all employees – at the rate of 10% for foreigners. The tax is based on where the performance is carried out, rather than where the actor is paid, meaning that major stars visiting Thailand for work cannot avoid the charge.

The Thai location industry has been lobbying for several years for the removal of the tax that has argued is a disincentive. The cabinet decision removes the tax for a period of five years.

The measure is also aimed at promoting the country’s “soft power”, which is in line with the government’s policy, said deputy government spokesperson Rachada Dhnadirek.

Thailand has long been a hub for regional production, thanks to high skills levels, relatively low costs, available studio space and varied locations which in recent years have stood in for New York, India and other parts of Southeast Asia. Among notable recent productions in the country have been Netflix film “Extraction,” Spike Lee’s “Da 5 Bloods,” Disney/Marvel’s “Ms Marvel” series, Apple TV+’s “Shantaram” and “The Meg 2.”

The government spokeswoman said that revenues from foreign productions had averaged THB3.5 billion per year ($99.1 million) between 2017-2021. The figure crashed to less than THB400 million ($11.3 million) in 2021, due in large measure to COVID-related problems.

The government estimates that by dropping the tax on foreign actors it will forgo approximately THB72 million ($2.04 million) of tax income per year.

One location coordinator told Variety that removing the disincentive that the acting tax represents would be cheaper than increasing the existing location incentives.