Tax Breaks Become Official Today

[Sunbelt Asia]

Tax breaks become official today

Tax breaks for property buyers will become effective today with the official publication in the Royal Gazette, according to Suparut Kawatkul, the Finance Ministry's permanent secretary.

Three laws would become effective, with the first reducing specific business taxes for property operators to 0.1% from 3% for transactions occurring over the next year.

The second law will increase waivers for individual taxpayers to the first 150,000 baht in income from 100,000 baht now, effective for the 2008 tax year. The increase will effectively reduce withholding taxes for individuals immediately.

The third law affects tax calculations for small companies with paid-up capital of less than five million baht, with the first 150,000 baht in income waived from corporate taxes. Profits after the first 150,000 will be charged under the normal ladder scale at rates from 15% to 30%.

The Interior Ministry has also announced that land transfer and registration fees will be cut to 0.01%, effective today.

The measures are part of a 40-billion-baht economic stimulus

http://www.bangkokpost.com/Business/29Mar2008_biz28.php

www.sunbeltasiagroup.com

[cclub75]

The second law will increase waivers for individual taxpayers to the first 150,000 baht in income from 100,000 baht now, effective for the 2008 tax year. The increase will effectively reduce withholding taxes for individuals immediately.

Youpeee ! We are going to save... 5 000 THB per year. 416 THB per month.

[before 100 001 to 500 000 at 10%. Now 150 001 to 500 000 at 10 %).

I'm overwhelmed. I mean this is serious "stimulation".

For that matter, I'm going to buy a second condo.

Actually, I feel .... very stimulated.

More seriously we talked about it already, but this "stimulus package" is a total joke. It won't help people with low (and even medium with the game of allowances and exemptions) incomes. And for rich people, it will be totally irrelevant...

The government can play long time with his dildo... But the effects on the economy are likely to be close to zero.

Edited March 29, 2008 by cclub75

[KireB]

Great news for the grassroots.

A lot of them dont pay tax!

[Indo-Siam]

CCC75 -

I think you might not appreciate how monetary policy works. If there are 500,000 affected taxpayers in Bangkok, that is 208,000,000 more baht per month being spent - initially. That money does not just get spent once - it circulates, with people who receive the initial monetary transaction then spending it - again and again.

The best way to see the effect is in a really cash-poor village, up-country. No one has any money to pay anyone else - lots of loans are owed among villagers. Then - someone comes along and builds a house and spends some money for local help - and suddenly that cash influx starts churning around - not just once, but from house to house, business to business.

The problem for governments is to inject money, without stimulating inflation. That is the theory behind spreading a relatively small amount among a large population.

Lots of young Thai office workers making 15,000 to 18,000 baht per month eat 25 baht lunches. They just got free lunches for three weeks a month. Not exactly a big windfall - but it helps.

The same goes for 22,500 baht more money being retained by small businesses for the year. It pays one month's rent, or buys one more computer. One way or another, it circulates.

Cheers!

Indo-Siam

[cclub75]

I think you might not appreciate how monetary policy works. If there are 500,000 affected taxpayers in Bangkok, that is 208,000,000 more baht per month being spent - initially. That money does not just get spent once - it circulates, with people who receive the initial monetary transaction then spending it - again and again.

Come on IndoSiam, this has nothing to do with monetary policy. This is fiscal policy.

We are talking here about a "stimulus package", with some tax cuts, aimed to boost... consumption.

Monetary policy would be to reduce interest rates in order to stimulate investments... And/or to let the THB appreciate, to reduce the inflation we currently import (oil and other commodities).

But, anyway, as I said, it won't influence much the behavior of individuals.

Same with the -modest- tax cuts for property...

Not enough to "stimulate and convince" those who were relectuant to buy a condo... It's just money thrown away to rich people who couldn't care less (opportunity effect).

Now, your idea about the liquidities/solvency problem in villages... On the paper it sounds nice. But again the total amount is laughable. And the principle highly controversial (it's like : to solve the debt problem in the world, just give money away).

(You want to create liquidities (real ones) ? Give famers some land, allow them to use it as colateral to get a loan).

Furthermore, and contrary to what you think, this kind of fiscal policy is a (cash) machine to fuel... inflation.

And last point : what happen after ? What will happen when this tea money will be consumed ? Back to square one.

Effects of this "stimulus package" ? A few weeks or months more of "mai pen rai we will see tomorrow" ... Plus some bonus for property developers. Some money back via the VAT... but probably compensated anyway with declining ressources (personal income tax, and corporate tax).

So overall... zero.

It's a dildo policy. A political toy. A short term fix of dope. The very ground level of intelligence.

[worldfun]

cc,

come see the light this is very simple math & it's a 50% increase in tax free allowance (100k to 150k) - you say it's peanuts I say you just don't get it 'coz you may fall outside of the low earners main benefit group LOL?

not all thai politicians behave stupid all the time OK

Edited March 29, 2008 by worldfun

[Gravelrash]

Of course anyone due to pay land transfer taxes may have a more positive outlook towards it all.

[Bagwan]

(You want to create liquidities (real ones) ? Give famers some land, allow them to use it as colateral to get a loan).

Yeah, great idea. The farmer then borrows money, can't repay, in some cases cannot even make interest payments, the bank forecloses and some pooyai picks up the farm for a song. My wife picked up two farms on the cheap by settling bank loans thus giving the seller a better deal than the bank. There is now a queue of the locals waiting for us to make further expansionist steps.

Allocating resources to the ignorant worsens their plight. Education must come first.

[johnnyk]

Lucky me, I hit a real "window of opportunity" with my land transfer taxes.

I wasn't able to do it in calendar 2007 and had to do it in February.

It cost me about 20,000 baht more as taxes were based on an offical assessment based on land size rather than on a figure I supplied.

Now the taxes have been reduced. Just think, 500 bottles of Chang down the wrong pipe!

[Seneque]

Land transfert taxes are already ridiculoulsly low .... this will encourage a form of speculation ... they should make a difference between farm land (no construction there) and land used for development (housing, factory, etc..) ... People owning large tracks of land (and doing nothing about it, waiting for the price to go up) are grateful to see taxes getting even lower ... it should be the other way around ...

Tax the capital, not the work.

I don't know if it makes sense ... anyway.... the thing i see is that thai people are really struggling more and more ... 32 baht for a liter of diesel ! off topic

[seasider]

Tax breaks become official today

Tax breaks for property buyers will become effective today with the official publication in the Royal Gazette, according to Suparut Kawatkul, the Finance Ministry's permanent secretary.

Three laws would become effective, with the first reducing specific business taxes for property operators to 0.1% from 3% for transactions occurring over the next year.

The second law will increase waivers for individual taxpayers to the first 150,000 baht in income from 100,000 baht now, effective for the 2008 tax year. The increase will effectively reduce withholding taxes for individuals immediately.

The third law affects tax calculations for small companies with paid-up capital of less than five million baht, with the first 150,000 baht in income waived from corporate taxes. Profits after the first 150,000 will be charged under the normal ladder scale at rates from 15% to 30%.

The Interior Ministry has also announced that land transfer and registration fees will be cut to 0.01%, effective today.

The measures are part of a 40-billion-baht economic stimulus

http://www.bangkokpost.com/Business/29Mar2008_biz28.php

www.sunbeltasiagroup.com

I am currently in the process of selling some land and the buyer offered to pay all the fees for a lower selling price.

Would someone be kind enough to do a comparison of the old land transfer fees/registration compared to the new fees.?

The calculations can be based on a figure (land sale price) of 1 million baht.

I have my own figure, just would like confirmation that i am correct.

Unusual for the buyer to offer to pay the fee's so quickly and ask for a reduction in price that was the very similiar to the cost of the land fees(old rate).

Wonder if he knew a few days ago that the fees were being cut?

[Bagwan]

After deciding to buy another 8 rai adjoining our farm I telephoned my UK bank and asked them to send me some of my money. I then returned to Pattaya that afternoon. The following morning I drew out a few shekels from the ATM and was amazed to find that the money had arrived and had been deposited in my UOB account. I went to my bank, drew out the requisite sum and crossed the road to my wife's bank and deposited the money in her account. I then telephoned her and told her to complete the deal. Off she went to the Amphur with the seller and a bank official who was in possession of the title deeds. Unfortunately, in a rush to get the deal done, she went dressed as for working in the fields.

All went well until a snotty bitch of a lady official, all gold bars and medals, asked my wife where she got the money from. She replied that I had made it available to her. What business it was of high and mighty official escapes me. Super bitch said in the hearing of others that she didn't believe my wife and said that she thought that my wife had stolen it. Although the deal went through, high and mighty madam refused to register the change in ownership.

A few days later my wife and I pitched up at the Amphur. I wore a suit, collar and tie and shoes, she, fresh from the beauty shop, was resplendent in one of her 'Mafia Madam' outfits. Lady Toffee Nose was pointed out to me and I accosted her. After making myself and my wife known I recounted events as related to me to refresh her memory. I then asked for her name so that I could pass it to my lawyer with a view to initiating a defamation suit.

We were ushered into the office of the pooyai away from the public gaze. He placated us and the 'madam' was made to apologise. He then got out a bottle of Black Label and even though it was only 10 a.m. I accepted a couple of snorts. To

put the matter to bed. the pooyai said that the transfer tax should be 16,000 and something baht but in the circumstances, would a charge of only 7,500 baht put matters right? Officials scurried around completing all the paperwork and ten minutes later we were on our way rejoicing. Seems to me that at times they make up the rules as they go along.

As a corollary to this, a few months later when at the Amphur on another matter, I met up with the pooyai and we exchanged pleasantries. When he asked how the farm was going I replied that I wouldn't really care if the lane leading to it was repaired and the drainage taken care of. Two days later a team turned up and concreted the lane up to the far boundary of our property. The poor souls living farther down the lane were told it would take another two or three years before money was made available to complete the job. Obviously that the meek shall inherit the Earth doesn't hold good in Thailand.

[Devil]

Second-hand home-buyers to benefit from waiver

Anyone planning to buy a resale home should wait for a tax waiver that is expected to come into effect soon.

Published on April 1, 2008

The tax privilege for second-hand houses is an extended version of the major tax stimulus package announced on March 4 for the property sector, which focused on purchases of new houses. The waiver for resale houses is mostly similar to that for new homes.

The tax cuts aimed at promoting the real-estate sector, in particular for new houses, became effective yesterday. The specific business tax rate has been cut from 3.3 per cent to 0.11 per cent. This tax rate applies to both individual and private firms engaging in the property business. Transaction and mortgage fees have also been cut - to 0.01 per cent from 2 per cent and 1 per cent, respectively.

A buyer pays either a transaction or mortgage fee, depending on the terms of contract between the parties. In practice, some buyers and sellers share half of the fee.

Deputy Finance Minister Pradit Pataraprasit said yesterday the government had agreed to extend these tax incentives to cover the resale home market.

The Revenue Department is expected to issue details of the regulations for resale houses in a few weeks. Meanwhile, the Interior Ministry in charge of transaction and mortgage fees is drafting its own regulations, he said.

The Finance Ministry will also submit to the Cabinet today a proposal for cheap housing loans for lower income groups. Those who have monthly earnings of no more than Bt15,000 are eligible to apply for loans from the Government Housing Bank.

Each can receive up to Bt600,000 from the bank, which plans to lend a total of Bt10 billion under the scheme.

The GHB will offer two types of fixed-rate mortgage: seven and 10 years. If home-buyers choose the seven-year fixed rate, the bank will charge interest at 4 per cent for the first seven years. After that, it will charge the minimum retail rate (MRR) minus 0.5 per cent.

If they choose the 10-year fixed rate, the bank will charge 4.5 per cent in the first 10 years and MRR minus 0.5 per cent for the remaining period.

The mortgage term could be up to 30 years. The ministry will guarantee GHB bonds worth Bt10 billion to support the project.

Wichit Chaitrong

The Nation

http://www.nationmultimedia.com/2008/04/01...ss_30069725.php

[Payboy]

That money does not just get spent once - it circulates, with people who receive the initial monetary transaction then spending it - again and again.

in other words a pyramid scheme....absolutely brilliant this stimulus

[steveromagnino]

That money does not just get spent once - it circulates, with people who receive the initial monetary transaction then spending it - again and again.

in other words a pyramid scheme....absolutely brilliant this stimulus

sorry....don't quite understand how proven principles of reducing tax in line with Keynesian economic principles are exactly a pyramid scheme.....

You aren't a closet supply sider are you?

[Payboy]

That money does not just get spent once - it circulates, with people who receive the initial monetary transaction then spending it - again and again.

in other words a pyramid scheme....absolutely brilliant this stimulus

sorry....don't quite understand how proven principles of reducing tax in line with Keynesian economic principles are exactly a pyramid scheme.....

You aren't a closet supply sider are you?

i couldnt care enough to explain.....

[steveromagnino]

That money does not just get spent once - it circulates, with people who receive the initial monetary transaction then spending it - again and again.

in other words a pyramid scheme....absolutely brilliant this stimulus

sorry....don't quite understand how proven principles of reducing tax in line with Keynesian economic principles are exactly a pyramid scheme.....

You aren't a closet supply sider are you?

i couldnt care enough to explain.....

fair enuff ;_)

[d44]

My secretary got an email from revenue yesterday. the 10% bracket runs from 150K to 500K which is nice for the majority of the thai population, i guess. However, the 37% bracket now starts at 3M where it used to be 4M, which is not so nice for the majority of me. I hope it was a typo......

[Heng]

0.01% Woohoooo!

[cclub75]

My secretary got an email from revenue yesterday. the 10% bracket runs from 150K to 500K which is nice for the majority of the thai population, i guess. However, the 37% bracket now starts at 3M where it used to be 4M, which is not so nice for the majority of me. I hope it was a typo......

Whaaaaaaaaaaat ? !!!

Check the website of Revenue Department.

http://www.rd.go.th/publish/6045.0.html

We didn't get any information about a change for the 37 %.

I'm going to check.