NCPO considers new taxes aimed at wealthy

[pookiki]

Anyone with rudimentary knowledge of tax laws know that VAT or sales taxes are regressive taxes and impose a bigger burden on the people who can afford to pay them the least. A graduated income tax that is loophole free is the best way to implement a fair tax system. All we have now is PR and a rubber stamp legislative assembly. There will be no debates only diktats.

Edited August 19, 2014 by pookiki

[AyG]

I thought the Junta was cracking down on populist policies??

I believe the main problem was populist policies that cost the government money. The inheritance and real estate tax are likely to help spread land to the poor and provide the government with money. The framework of this tax is designed to insulate the poor from being taxed and subject large dormant parcels to ever increasing taxes thus the rich will be encouraged to sell the land.

I think it's naive to think that land taxes will assist with land distribution reform. The predominantly Thai-Chinese families would never be parted from their wealth by choice. Far more likely they'll increase the rent for the tenant farmers to cover the additional tax.

[wwest5829]

How is increasing VAT tax supposed to help the poor???

Reducing income tax for the poor??? The poorest don't file tax returns now, so how would it benefit them? Three percent extra VAT, on the other hand, will make their life so much harder for them.

Oh well, I guess BIG BROTHER knows best. Hail BIG BROTHER and his infinite wisdom and generosity

Agree that increasing the VAT would be harmful rather than helpful. Think you are sounding overly harsh on this move by the junta. We have seen already the current tax system not cutting it and being subject to the wealthy's power to severely limit their tax exposure. In this case, this dictated appearing change seems positive, IMHO.

[SteveFong]

I thought the Junta was cracking down on populist policies??

I believe the main problem was populist policies that cost the government money. The inheritance and real estate tax are likely to help spread land to the poor and provide the government with money. The framework of this tax is designed to insulate the poor from being taxed and subject large dormant parcels to ever increasing taxes thus the rich will be encouraged to sell the land.

I think it's naive to think that land taxes will assist with land distribution reform. The predominantly Thai-Chinese families would never be parted from their wealth by choice. Far more likely they'll increase the rent for the tenant farmers to cover the additional tax.

land being actively farmed, can hardly be called dormant

the Agriculture exemption must be applied or they will have a real revolt,

it is not implied that active farmland be usurped by taxes,

but unfinished buildings, the plague of thailand, it looks like the Bronx in the 70's in many parts of Thailand, and I am trying to be kind

[leesgems]

I thought the Junta was cracking down on populist policies??

I believe the main problem was populist policies that cost the government money. The inheritance and real estate tax are likely to help spread land to the poor and provide the government with money. The framework of this tax is designed to insulate the poor from being taxed and subject large dormant parcels to ever increasing taxes thus the rich will be encouraged to sell the land.

I think it's naive to think that land taxes will assist with land distribution reform. The predominantly Thai-Chinese families would never be parted from their wealth by choice. Far more likely they'll increase the rent for the tenant farmers to cover the additional tax.

The tax policies they are proposing are designed to encourage dormant land owners to sell. Much land is not rented, only is held in speculation. Those rich will certainly not like being separated from their money by having to pay taxes on that land that increase each year while the land remains dormant. The rich that do rent the ground to farmers will certainly raise the rent but that can only go so high before the farmers will not be able to farm the rented ground so raising rent will not solve the rich land owner's problems.

I believe the junta has proved to be very effective in solving some very old and deeply rooted problems so I will be watching this land tax with a positive attitude.

[ColdSingha]

Just what the economy doesn't need: uncertainty. For 2 years. As for the wealthy paying more of the tax burden...yeah, right. We shall watch that with interest but don't hold your breath.

precisely, the wealthy hold nothing in their own names hence there will be nothing to tax

everything is on the company expense account, held offshore or in trust

[SteveFong]

I thought the Junta was cracking down on populist policies??

I believe the main problem was populist policies that cost the government money. The inheritance and real estate tax are likely to help spread land to the poor and provide the government with money. The framework of this tax is designed to insulate the poor from being taxed and subject large dormant parcels to ever increasing taxes thus the rich will be encouraged to sell the land.

I think it's naive to think that land taxes will assist with land distribution reform. The predominantly Thai-Chinese families would never be parted from their wealth by choice. Far more likely they'll increase the rent for the tenant farmers to cover the additional tax.

The tax policies they are proposing are designed to encourage dormant land owners to sell. Much land is not rented, only is held in speculation. Those rich will certainly not like being separated from their money by having to pay taxes on that land that increase each year while the land remains dormant. The rich that do rent the ground to farmers will certainly raise the rent but that can only go so high before the farmers will not be able to farm the rented ground so raising rent will not solve the rich land owner's problems.

I believe the junta has proved to be very effective in solving some very old and deeply rooted problems so I will be watching this land tax with a positive attitude.

and, they can also sell to developers and ease the housing problems

[ColdSingha]

The need for social services in Thailand is dire

Hell, they dont even have sidewalks that meet

Which is why there is a need for some property taxes, as long as it's properly and fairly implemented. I hated paying property taxes when I lived in the states, but I did get to enjoy reasonably funded schools that are within walking distance that are free, libraries, sidewalks, street cleaning on a regular basis, professional emergency services and many other services that are lacking in Thailand.

$17 trillion in debt.. just saying

[wxpwzrd]

Actually, their entire tax system needs a complete overhaul.

[pookiki]

Where are all those who passionately opposed the tyranny of the majority? Now there is only tyranny! Taxation without representation ring a bell?

[SteveFong]

Just what the economy doesn't need: uncertainty. For 2 years. As for the wealthy paying more of the tax burden...yeah, right. We shall watch that with interest but don't hold your breath.

precisely, the wealthy hold nothing in their own names hence there will be nothing to tax

everything is on the company expense account, held offshore or in trust

let them try to circumvent the tax, and see where they end up

[Chris Lawrence]

The General needs money? Needs to tax profits. Capital gains tax; tax on share trading profits.

The guy who owned the derilict building in Bangkok that was featured as having its own built in fish pond, could possibly pay a tax on this building?

Inheritance tax is not good, as this type of money is not a profit in its real sence. Money from a inheritance should have been taxed during the lifetime of the person.

But, the wealthy in Thailand is a good place to start to get some money coming in for the state.

[belg]

i hope they include all the (ex) generals where surprisingly many are billionaires on a governement salary

[DrTuner]

Bans & Taxes. So much for a good start.

[Docno]

if you took all the money away from the rich and gave it to the poor within 10 years the rich would have it all back again and the poor would once again be poor..

cant fix being pennywise

Interesting. What are the underlying assumptions here? Let's see... that the rich are rich because they are simply smarter and harder working. The poor are poor because they cannot keep money in their pockets and they spend it on frivolities.

Just curious... have you spent any real time with poor people, especially in developing countries? I am what would be considered 'rich' (not super-rich mind you) even in my home country ... that was one of the first things my divorce lawyer back there told me. But I'm keenly aware of the advantages I've had simply being born into a supportive middle-class family in a fully developed country. I would never make the same assumptions as you...

[manarak]

According to the World Bank, income inequality in Thailand has fallen in recent years but "stays consistently high above 0.45," as measured by the Gini coefficient. Research from the Thailand Development and Research Institution (TDRI) indicates that economic inequality in Thailand is more pronounced than in similar-sized economies in countries like Colombia, Brazil, Malaysia and Indonesia.

Income inequality is a good thing.

What needs to be guaranteed is:

- minimum guaranteed standard of living

- low living costs

- fair opportunities for people to succeed

- good free education

- good free healthcare

Income inequality has been reduced in western countries by slicing off a lot from the upper middle class and giving it to the poor, the result is that everything is expensive, living costs are high for everybody, high real estate costs, high unemployment.

This is not the way to go.

Tax the wealthy in an acceptable manner and leave the middle class alone, and lower the taxes for the lower classes.

A yearly tax of 0.5% to 1% seems adequate for wealth levels above 150 million and 300 million baht, respectively, and of 10% and 20% on inheritance within these same brackets.

[Bernard Flint]

When the new ELECTED government start, they can change anything they want, but it will be the EX general hahahahahahahah

[Thanet]

Be a lot easier just to get the rich to pay the current taxes they appear to avoid.

That's true.

I don't know how he will cut taxes for the poor either. They already don't pay any income tax, so how exactly will he cut their taxes further?

I also thought that the NCPO had forbidden populist policies.

[Thai at Heart]

How is increasing VAT tax supposed to help the poor???

Reducing income tax for the poor??? The poorest don't file tax returns now, so how would it benefit them? Three percent extra VAT, on the other hand, will make their life so much harder for them.

Oh well, I guess BIG BROTHER knows best. Hail BIG BROTHER and his infinite wisdom and generosity

You do realise that it is perfectly feasible to live a frugal life in Thailand and never pay one cent of VAT.

[ginjag]

Be a lot easier just to get the rich to pay the current taxes they appear to avoid.

That's true.

I don't know how he will cut taxes for the poor either. They already don't pay any income tax, so how exactly will he cut their taxes further?

I also thought that the NCPO had forbidden populist policies.

Only one way to cut poor peoples taxes, is to cut the indirect tax, electric =water=gas bottles=---some essential foods subsidize a little.

Electric below a certain amount --no tax, same water, etc. The rich will not benefit on electric/water this way. they will pay the said price.

[sweatalot]

"Since seizing power from the elected government on 22 May, the NCPO has launched a number of campaigns aimed at winning the hearts and minds of ordinary Thais."

that's Kaosod

It should read:

Since seizing power from the corrupt government on 22 May, the NCPO has launched a number of campaigns aimed at improving conditions of ordinary Thais.

[sweatalot]

ahh yes, a general who cares about the public purse.

ahh yey, a poster who does not want to believe what he does not like. You still mourn for the corrupted gang that is gone?

[Jim walker]

Increase the taxes of the rich put up the VAT tax the poor some more and when the rich elite come into power there will be even more money in the coffers to filter off for themselves, oh lovely money money.

[icare999]

This policy could indeed put an interesting slant on how those in positions of power politically and commercially along with the average Thai person support this current junta and any such subsequent administrations as may evolve.

Spreading the tax burden a little more evenly is indeed a vote catcher, we should remember the vast majority of the electorate in any country have the voting power if not the wealth power.

There were as we are all aware of no doubt muttering from previous administrations concerning land taxes, inheritance taxes etc but to date nothing has been done to implement these proposed measures. The one fly in the ointment in my view and many others views too is the proposed possible implementation of a 10% V.A.T. is a harmful move which hits the lower paid far harder than those with above average incomes

When ones assets are threatened cheap rhetoric is a fine defence and it creates a veil of deceit that cloaks the unwillingness to implement such policies.

In fact if we look back into recent political history here we see clear evidence of the laws being amended to benefit those with enormous commercial assets with the taxation policies being modified regarding the taxes payable on share trading deals along with the law relating to foreign shareholding ownership policies so as to benefit one persons particular family businesses. With regard to land taxation upon death there needs to be a base tax free level on the estate value as there is in the U.K .

Small family owned land or other commercial assets say to the level of 4 million baht or as an example let us say of 300 rai should be exempt from taxation as a death duty inheritance factor.

So if there is to be a junta with a controlling power and no opposition as such to its action and that junta actually implements a fairer taxation system that has to be a positive move for all concerned.

4 million baht even here will still hit hard a lot of poor land owners in some parts that wont even buy a rai and even here 20 million is not exactly stinking rich

[Eric Loh]

Raising tax for property. So many governments have proposed it but never have the fortitude to implement and prefer to kick the can down the road. Don't see that happening now as generals own land too plus their wealthy supporters. Though quite sure VAT for increase as its painless for the wealthy but again not sure during junta time as it anger the populace they trying to please. Still some tax reform will be implemented for window dressing.

[khunken]

Raising tax for property. So many governments have proposed it but never have the fortitude to implement and prefer to kick the can down the road. Don't see that happening now as generals own land too plus their wealthy supporters. Though quite sure VAT for increase as its painless for the wealthy but again not sure during junta time as it anger the populace they trying to please. Still some tax reform will be implemented for window dressing.

You're right that few governments have the guts to implement a property tax but it has been done in many developed countries. If it is done correctly with idle land being the target for the highest rate and a decreasing scale for various types of buildings, together with a zero rate for used agriculture land - it would be fair.

As for a VAT increase, it can be increased so as to hardly affect the poor if food (as now), clothing, water, cooking gas, electricity and transport are excluded or have a built-in subsidy.

I can't understand why some think this is a 'populist policy'. It's likely to be a very 'un-populist' policy with major land owners. As it all is only under consideration, it's a bit premature for any sour grapes comments.

[remorhaz]

New taxes will work as well here as every other country. The government will get bigger, more bloated, less efficient, more intrusive, and less connected to the people they are supposed to serve. The "rich" will avoid taxes as they always do because they always find ways to get around the laws they don't like while the poor and working classes will shoulder the increased burdens. This plays out in every country, in every continent, and people still buy into it. I can understand it if you are a high roller who knows it won't effect you - you'll make money from this by negotiatng a kickback of the VAT for your "expenses" or such but seeing the regular people duping themselves is just sad.

[Christie Paul]

New taxes will work as well here as every other country. The government will get bigger, more bloated, less efficient, more intrusive, and less connected to the people they are supposed to serve. The "rich" will avoid taxes as they always do because they always find ways to get around the laws they don't like while the poor and working classes will shoulder the increased burdens. This plays out in every country, in every continent, and people still buy into it. I can understand it if you are a high roller who knows it won't effect you - you'll make money from this by negotiatng a kickback of the VAT for your "expenses" or such but seeing the regular people duping themselves is just sad.

Precisely.

[Krataiboy]

However, last week the NCPO rejected a proposal to regulate water and air pollution, arguing that a new set of laws will impose more burdens on business owners.

Whereas water and air pollution, of course, only impose more burdens on everybody.

Thailand already has a bad record when it comes to businesses putting profits before protecting public health and the environment. This does not sound like a step in the right direction.

[smutcakes]

Not ready for western style democracy, but ready for western style taxes.