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Pm Floats Proposal For Increase In Tax Revenue

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News item below culled from Nation newspaper, Sun Jan.25

(BB's commentary follows)

More revenue needed to boost welfare, says Abhisit

Prime Minister Abhisit Vejjajiva said yesterday he was determined to get the land- and inheritance-tax legislation passed within the term of his administration.

Well-known political observers yesterday welcomed the ambitious tax plan, but they expressed concern about possible opposition from those who would stand to lose.

Abhisit said he would try to convince those who would be affected, mostly people with large fortunes and lots of land, including some politicians from within the ruling Democrat Party.

The government, he insisted, was not pushing it for its own benefit but to bring about social justice.

Finance Minister Korn Chatikavanij is overseeing the matter, Abhisit said yesterday, adding that there were many details that needed to be to closely looked at.

Land tax will likely be exempted for those having housing problems while people with lots of idle land will be taxed progressively.

Abhisit said that in other countries inheritance tax had always been adjusted and improved upon. The matter will take some time, however, he said.

When asked how he would deal with rich people opposed to it, Abhisit said he would "explain" to them and convince them of the need.

Asked if the middle class and the elite, who supported the party, would oppose it, the premier promised to look at the matter from all angles.

The PM stressed that the government's intention to offer better social welfare meant tax revenue from income tax alone would not be enough to cover it.

Former agriculture minister Somsak Prissanananthakul said he was fully supportive of the move and added that he had always been trying to introduce such laws.

Somsak added, however, that agricultural land should not be taxed further while the industrial and property sectors should be taxed more.

If this government is serious, then it should go ahead and work towards equality, he said.

Suriyasai Katasila, coordinator of the People's Alliance for Democracy (PAD), yesterday lauded the initiative as a first step towards land reform and solving the poverty issue.

The PAD leader said he believed the majority of the people backed the move and added that statistics showed that 90 per cent of the Thai population held less than one rai of land per head while the other 10 per cent had more than 100 rai each on average.

Suriyasai said the government might face opposition from capitalists but as long as the majority of the population supported the move the government would not be destabilised.

Meanwhile, Seri Suwanphanond, former senator and drafter of the 1997 constitution, yesterday said the idea was good because it was unjust for any individual to hold too much land.

He added that the government must beware of the rich, who were mostly politically influential, some even financiers of political parties or launderers of ill-gotten money by purchasing land.

The government must be clear about the matter, he said, adding that it would have a wide impact and consensus was needed.

Seri warned of opposition within the ruling party but added that the state could earn more revenue if the move succeeded.

Banjerd Singkaneti, a lecturer at Thammasat University's Faculty of Law, yesterday also supported the move to tax land holdings.

He said it was a good measure, already adopted by many European countries, aimed at preventing land-hoarding for price speculation. However, he also warned that there were possible downsides and the government should weigh the pros and cons before making a decision.

--- end of article ---

BB's comments from the peanut gallery; Don't know about inheritance taxes, but from bits I've heard about property taxes here in Thailand, they seem to be woefully low. I say 'woefully' because taxes are important for a society to function well. Of course a lot is predicated on how wisely that revenue is spent. Even so, landowners and house owners can be expected to pay a reasonable amount of taxes, with the trust that revenue is spent for essential infrastructure and services that benefit all - especially the disadvantaged.

The article above mentions welfare, but even in the best distribution scenario, there will remain significant portions of Thai residents who fall outside the system - because of Thai gov't restrictions. I refer mainly to hill tribe people who, even though some have resided in Thailand for generations, are still treated like dirt and are kept stateless by the gordian knot known as Thai bureaucracy.

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I say: Lead by example, and I will follow suit. Until then, don't expect me to pay any more taxes than Those Who Lead - it's just not fair.

Does the Crown Property Bureau pay tax on all of its incomes (leases, etc.)?

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In the area where we live, people are raising families by farming ten rai. This is very basic subsistence farming and there is certainly no money to pay land taxes. Exemptions for those types of farming families would have to be made. Major land holders should pay taxes especially those who were given the land or those politicians who manipulated the land programs and received large parcels meant for the poor.

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I say: Lead by example, and I will follow suit. Until then, don't expect me to pay any more taxes than Those Who Lead - it's just not fair.

Does the Crown Property Bureau pay tax on all of its incomes (leases, etc.)?

good point, particularly re; CPB which I doubt pays taxes on the vast amount of holdings it administers.

....similar situation (little or no property taxes) for rich who often amass land holdings at fire-sale prices and with insider dealing.

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I say: Lead by example, and I will follow suit. Until then, don't expect me to pay any more taxes than Those Who Lead - it's just not fair.

Does the Crown Property Bureau pay tax on all of its incomes (leases, etc.)?

There is no way that will ever happen, if implemented it will be exempted. Be interesting to see this develop, very much doubt the rich will ever pay (after all what was the point of installing the Democrats), could somehow end up as a middle class tax.

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So, if the government made everyone pay property taxes, would the banks be forced to pay for the taxes on all the non performing assets they held on their books?

There are at least 3 homes with 2 km of here which are NPA's from banks, and will clearly never be sold because the banks are unwilling to accept a reasonable offer which reflects their run down condition. (I know because I checked them all before we bought ours. They had been unsold since the last economic crisis, and they are still unsold today.) Perhaps if the banks had to pay property taxes it might help in making the financial institutions more willing to cut their losses.

Any chance of this happening?

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