Land-Tax Bill To Reach Thai Parliament 'Soon'

[webfact]

Land-tax bill to reach Parliament 'soon'

Wichit Chaitrong

The Nation

Kittiratt wants changes to long-awaited draft first

BANGKOK: -- The long-delayed land and property tax bill may be forwarded to Parliament for debate soon, now that Finance Minister Kittiratt Na-Ranong has expressed his support for it, Somchai Sujjapongse, director-general of the Fiscal Policy Office, said yesterday.

While Kittiratt backs the bill, which was drafted by the previous Democrat-led government, he has asked officials to make some changes.

Instead of being imposed nationwide, Kittiratt suggested the legislation should apply only to land plots that have been appraised by the Treasury Department, Somchai said. Kittiratt's idea is quite practical, since the Treasury Department has so far been able to evaluate land prices for about 6 million of 30 million land plots nationwide, according to Somchai.

He said he had proposed to Kittiratt that the ceiling on tax rates that are based on appraisal prices be raised to make the bill flexible. The rates proposed by the previous government were 0.05 per cent on farmland, 0.1 per cent on land used for residential purposes, and 0.5 per cent on land for commercial use. Unused land would be subject to a 0.5-per-cent rate, with the rate doubling every three years.

The ceiling rates are quite low compared with rates imposed by other countries, said Somchai. "It does not mean that local governments will adopt maximum rates, but the effective rates would be much lower."

Another change urged by Kittiratt relates to tax allowances, he said. The current draft offers tax breaks for both small and low-value land plots.

"But the new draft would offer tax breaks based solely on value," Somchai said.

For example, if a land plot is worth less than a certain amount - say, Bt500,000 or Bt 1 million - it would not be subject to property tax. (These figures are purely hypothetical.) The tax exemption would be given to farmers and residential landowners.

Kittiratt also wants a proposal to create a Land Bank scrapped, Somchai said.

"The reason is that the central government should not take local governments' revenue," he said.

The previous government proposed setting up the Land Bank, which would buy land from people and then redistribute it to landless people, with the funding coming from property taxes.

Somchai said he had consulted with relevant parties, who would send back their proposals within a month. A public hearing will be held before the proposals are forwarded to Kittiratt, he said.

The property tax bill is long overdue. Tax officials and economists have pushed for it for many decades without success. Political support for the bill has been weak, as most politicians are large landholders.

The previous government's finance minister, Korn Chatikavanij, got the Cabinet to approve the bill, arguing that Thailand should tax wealth to create a more just system. The current tax system is said to be unfair to wage earners, as their wages are taxed, while the financial assets, land and other wealth of the rich are hardly taxed.

The land and property tax would be collected by local governments and is expected to help them get more revenue for community development.

The government is under pressure to boost tax revenue, as it plans to cut the corporate tax rate further to 20 per cent next year after cutting it from 30 per cent to 23 per cent this year.

-- The Nation 2012-06-09

[OzMick]

This will be as popular in parliament as a pork chop in a mosque.

[Moruya]

0.05% for farmland:

So if A rai costs 50,000 the the tax would equate to 25 baht per rai.

A farmers with 20 rai will pay 500B per year

Sounds reasonable.

[thaicbr]

This will be as popular in parliament as a pork chop in a mosque.

not so sure about that. If you read it carefully it would seem all the good stuff has been taken out to leave fluff and grey area's perfect for PTP land owners ..oops sorry MP's

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[Pseudolus]

Ah ha but you seem to miss the vital statement

Kittiratt also wants a proposal to create a Land Bank scrapped, Somchai said. "The previous government proposed setting up the Land Bank, which would buy land from people and then redistribute it to landless people, with the funding coming from property taxes."

Basically by the sound of this, they do not like the idea of land purchases and distribution being done in a way that does not profit the rich elite SOB's. They are more happy with forced procurements being seeded off to their cronies at a cheap price to then flog them on the open market.

No such thing as a good deed in Thailand, unless it's a land deed in the clutches of the HiSo tools.

[bangkokheat]

The previous government proposed setting up the Land Bank, WHICH WOULD BUY LAND FROM PEOPLE and then redistribute it to landless people, with the funding coming from property taxes.The property tax bill is long overdue.

Tax officials and economists have pushed for it for many decades without success. Political support for the bill has been weak, as most POLITICIANS ARE LARGE LANDHOLDERS

hmmmmmm I feel there is an evil wind blowing or did someone just cut open a durian, look out, here come the cows for a further milking to fatten up the little piggies

[Misterwhisper]

It's about time those obscenely wealthy land owners who're amassing more and more plots at ridiculously low prices and let them sit unused for years for pure speculative purposes finally experience some blood letting.

I am not surprised that this bill has been stalled for so long, because we all know who these rich land owners are - the very same people who have delayed this bill again and again.

But as I can see there are already a lot of provisions worked into the draft that will alow the richest of them all get away with paying almost nothing, while probably Somchai the farmer will be bled dry as usual.

[GentlemanJim]

As only land that has been assessed by the treasury will be taxed, I imagine it will be a very long time before the treasury is allowed to value lands owned by MP's and wealthy landlords.

[Foggy Bottom]

0.5% tax for unused land, doubling every 3 years - wonder if this will also apply to abandoned, half-finished building sites? I guess it'll also see a rise in the land used for grazing and "orchards / forestry plantation", which would be no bad thing really ... although it means the hi-so's will have to learn animal husbandry etc. otherwise renting the land to other farmers could class it as commercial land at the higher tax rate.

[GentlemanJim]

entered in error

Edited June 9, 2012 by GentlemanJim

[bigbamboo]

As only land that has been assessed by the treasury will be taxed, I imagine it will be a very long time before the treasury is allowed to value lands owned by MP's and wealthy landlords.

Yes, a nice legal loophole big enough to drive a bus of redshirts through.

Edited June 9, 2012 by bigbamboo

[redroo]

The few can only steal for so long

untill the stolen from

rise up

to take back

what was stolen from

They better start giving soon

[thaicbr]

The few can only steal for so long

untill the stolen from

rise up

to take back

what was stolen from

They better start giving soon

They do steal and give back.

What do you think the 105 computer tablets for 11 million students is.

Or the 300b min salary (that ones especially good as the government do not even pay)

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[Rancid]

This is the thin end of the wedge to introduce insidious western style impoverishing land tax on the unsuspecting public. Do you own property or do you lease it from the thieving government? Can't believe anyone having lived under this theft at home would actually endorse it here. In Thailand now I have a mufti-million baht house nearby and a bamboo slum across the road. The slum is there because there are no land taxes and rightfully so, the owners are poor but the land has been in the family a long time. In the West the government decides to raise the land tax in a certain area as it has become valuable, the result is that the poor can't afford it and move out. Guess who moves in at a bargain? And why more tax, so that politicians can raise their salaries/benefits and employ more useless bureaucrats to parasite off the rest of us.

The rich will without any doubt have an angle to dodge this, they always do, either through corruption or fear with collectors or tax write offs. The exemptions making it look like it is after the rich will be removed later, the point is to get the legislation passed. The rich control every aspect government here, does anyone really imagine this would be even introduced without getting the nod first? Durrh...

[Rancid]

This is the thin end of the wedge to introduce insidious western style impoverishing land tax on the unsuspecting public. Do you own property or do you lease it from the thieving government? Can't believe anyone having lived under this theft at home would actually endorse it here. In Thailand now I have a mufti-million baht house nearby and a bamboo slum across the road. The slum is there because there are no land taxes and rightfully so, the owners are poor but the land has been in the family a long time. In the West the government decides to raise the land tax in a certain area as it has become valuable, the result is that the poor can't afford it and move out. Guess who moves in at a bargain? And why more tax, so that politicians can raise their salaries/benefits and employ more useless bureaucrats to parasite off the rest of us.

The rich will without any doubt have an angle to dodge this, they always do, either through corruption or fear with collectors or tax write offs. The exemptions making it look like it is after the rich will be removed later, the point is to get the legislation passed. The rich control every aspect government here, does anyone really imagine this would be even introduced without getting the nod first? Durrh...

[Skywalker69]

The few can only steal for so long

untill the stolen from

rise up

to take back

what was stolen from

They better start giving soon

They do steal and give back.

What do you think the 105 computer tablets for 11 million students is.

Or the 300b min salary (that ones especially good as the government do not even pay)

Sent from my GT-P1010 using Thaivisa Connect App

I think i counts for the credit card for taxi drivers also. Give and take, but take more than you give. PTP´s secret policy.

[noitom]

If farmers are the owners, it seems fair to pay this low tax. If they are not the owners, farmers should pay no tax. The tax should be paid by the owners who let the farmers "work the land" and live there. The tax on residential land and commercial land seems very low, especially in Bangkok and particularly CBD, Chinatown, Sukhumvit, and going north up to Don Muang. The rates in Bangkok should be higher than in Roi-Et let's say. All those residential buildings and commercial operations along Sukhumvit should be taxed at a much higher rate to fund new electrical, internet, and road investment.

Vacancy rates should be the same. As Korn points out, why should wealthy land owners pay no tax even if it's idle? The value of the capital is not doing anything to help the economy by letting idle land and buildings go untaxed. Land owners in Bangkok have never chipped in by way of taxes to contribute to funding of infrastructure.

[waza]

Sound like a real money spinner for someone, but only 20% of land will be taxed. No surprise who will be exempt.

Edited June 9, 2012 by waza

[oops]

They also said if the property is deemed worthless they wouldn't have to pay any tax. Nice loop hole.

If I inturpret this properly it means that the Thai's holding tons of property would be better off keeping it in a distrot condition

rather than fixing it up so the rest of the village isn't devalued because of properties that look abandon.

They need to place a higher tax on abandon properties, properties that not taken care of to encourage the sell of the property

or for the owner to take care of it. After the tax hits a certian number it should go on the auction block.

I just drove through Bang plee the other day and notice some very nice homes "Tons of them" abandon most likely from wealthy Thai's that bought

them for their (me he noy) and have either died and no one knew he owned the property or just plain forgot about the property. While the trees and

weeds have taken over the structure themselves are actually very beautiful if someone came in and did some repairs and painted.

The biggest problem are commercial buildings and shop houses that make Thailand look like a cemetary of cold grey buildings...laying all over the place. these need to be taxed heavily .