NCPO considers new taxes aimed at wealthy

[greenchair]

The new taxes are needed to boost the state budget, so they can pay all the salaries and retirement packages of all the new jobs created in Parliament of late. not to mention the ones who now have 2 jobs and 2salaries I assume. Originally there has been a land tax for large pieces of land and unoccupied land. But those sneaky rich folks managed to worm their way out of paying through loopholes. So now the only way to get that money is by taxing all house holds including the poor, which will close those loopholes. I am sure the rich will get out of these taxes if there is a way. but the poor are just not sneaky enough so will shoulder the burden.

[AyG]

Originally there has been a land tax for large pieces of land and unoccupied land.

There has never, to the best of my knowledge, been a land tax (i.e. a tax for continued ownership of land as opposed to taxes associated with the purchase/transfer of land - and those taxes have not taken into account land area or whether it's occupied).

Perhaps you'd care to back up what you state?

[Benmart]

e

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

I certainly hope so.

But then again, I do not pay taxes here on my foreign derived retirement incomes, I don't vote and I'm not Thai. It's a Thai purse of which I have a limited stake in.

[Benmart]

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

U

The types of proposed taxes are hardly western in origin. The Han Dynasty had some parallel taxation schemes.

If time permits, please visit:

http://en.m.wikipedia.org/wiki/Economy_of_the_Han_dynasty#Taxation.2C_property.2C_and_social_class

[Ricardo]

Nobody has yet speculated on the tax-implications of an Inheritance-Tax, for the estates of farangs who live here, or don't we count because we're just guests ?

And will it just be on assets-within-Thailand, or on global assets, I wonder ?

[Time Traveller]

Unless the military plan on some new tanks, subs or aircraft carrier, I'm not really sure there is any need for new taxes. If you remove the wasteful spending by the last government on rice pledging, then the budget wasn't so bad. Certainly there are areas where enforcement would make the rich contribute more, and taxing overseas income on thai residents (yes expats as well) would be worthwhile.

But any tax will have unintended consequences and distort markets again. Property taxes are a pointless when the largest landholder will be unlikely to pay. Property tax will just create incentives to fill in any vacant space with another factory, shophouse, codominium, office building, hotels or shopping center. A pity there are not more open space areas.

[Time Traveller]

Unless the military plan on some new tanks, subs or aircraft carrier, I'm not really sure there is any need for new taxes. If you remove the wasteful spending by the last government on rice pledging, then the budget wasn't so bad. Certainly there are areas where enforcement would make the rich contribute more, and taxing overseas income on thai residents (yes expats as well) would be worthwhile.

But any tax will have unintended consequences and distort markets again. Property taxes are a pointless when the largest landholder will be unlikely to pay. Property tax will just create incentives to fill in any vacant space with another factory, shophouse, codominium, office building, hotels or shopping center. A pity there are not more open space areas.

[Time Traveller]

deleted double post

Edited August 19, 2014 by Time Traveller

[connda]

Raising the VAT disproportionally effect the poor. This is lowering their taxes? Really?

[Balance]

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

You are drinking too much Singha. No one is talking about taking from the rich and giving it to the poor. There is a several hundred year history of the rich consciously and methodically keeping rural people dumb and so poor that all options to better themselves are simply nonexistent.

It is about leveling the football field because right now the poor are running up a 20% incline. It is about increasing NOT eliminating the money for rural development and small or even micro business funding and it is about fixing the biggest blight on Thailand:the educational system. It is about decentralization of the industrial policy so that factories with good paying jobs and the training to do them really well are built in rural areas. It is about making Paddi farming profitable and providing inexpensive crop insurance.

But that is not what the news is about, is it?

[ColdSingha]

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

You are drinking too much Singha. No one is talking about taking from the rich and giving it to the poor. There is a several hundred year history of the rich consciously and methodically keeping rural people dumb and so poor that all options to better themselves are simply nonexistent.

It is about leveling the football field because right now the poor are running up a 20% incline. It is about increasing NOT eliminating the money for rural development and small or even micro business funding and it is about fixing the biggest blight on Thailand:the educational system. It is about decentralization of the industrial policy so that factories with good paying jobs and the training to do them really well are built in rural areas. It is about making Paddi farming profitable and providing inexpensive crop insurance.

But that is not what the news is about, is it?

NCPO considers new taxes aimed at wealthy

BANGKOK — Thailand's military junta is considering new inheritance and property taxes to address the country's wealthy disparity, sources say.

Ministry of Finance officials said the NCPO also agreed with raising taxes on properties owned by land magnates in Thailand and cutting taxes for the poor.

certainly looks like it

[uty6543]

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

There is a big difference between populist policies and policies which are popular.

[AleG]

Maybe an expedient way to increase the tax revenue and reduce income disparity would be to repeal the 30% tax cut to the corporate taxes PTP introduced shortly after coming to power.

[Thai at Heart]

 

Unless the military plan on some new tanks, subs or aircraft carrier, I'm not really sure there is any need for new taxes. If you remove the wasteful spending by the last government on rice pledging, then the budget wasn't so bad. Certainly there are areas where enforcement would make the rich contribute more, and taxing overseas income on thai residents (yes expats as well) would be worthwhile.

But any tax will have unintended consequences and distort markets again. Property taxes are a pointless when the largest landholder will be unlikely to pay. Property tax will just create incentives to fill in any vacant space with another factory, shophouse, codominium, office building, hotels or shopping center. A pity there are not more open space areas.

 

The amount of people here paying income taxes properly is very small. Just check the stats. Evasion is huge, and money gets filtered into property.

[nicholao]

Property taxes are a pointless when the largest landholder will be unlikely to pay.

Monte would ask you why you say Charoen "will be unlikely to pay" property tax?

Charoen Sirivadhanabhakdi & family have emerged as Thailand's largest land owner with 630,000 rai

[whybother]

The administrative costs of a land tax would be immense. The owners of every piece of land would need to be identified. The value of each piece of land would need to be appraised (and possibly appealed against) every few years. Does Thailand really need this additional bureaucracy? Surely it would be better to enforce existing tax law, clamping down on tax avoidance.

If there were to be a change in tax law, there would be two changes I'd think are fair: taxing unearned overseas income and a Capital Gains Tax. Neither would affect the poor adversely.

Shouldn't the owners of every piece of land already be known?

[3NUMBAS]

wont they all join the monkhood as you can be a billionaire with a chopper without hindrance

[Ricardo]

The administrative costs of a land tax would be immense. The owners of every piece of land would need to be identified. The value of each piece of land would need to be appraised (and possibly appealed against) every few years. Does Thailand really need this additional bureaucracy? Surely it would be better to enforce existing tax law, clamping down on tax avoidance.

If there were to be a change in tax law, there would be two changes I'd think are fair: taxing unearned overseas income and a Capital Gains Tax. Neither would affect the poor adversely.

Shouldn't the owners of every piece of land already be known?

Only if the records kept by the Land-Office, Forestry-Department, Irrigation & loads of other quangos are fully up-to-date, which IME they're not always.

My nearest village for example, some 30-40 buildings/shops/restaurants/houses & two village petrol-stations, is still officially forest. This costs the more-successful owners monthly tea-money. And the officials seem curiously reluctant to progress the change-of-status of the plots of land.

Not to mention hill-tribe villages & land.

And official land-valuations are a joke, as is widely known.

[whybother]

The administrative costs of a land tax would be immense. The owners of every piece of land would need to be identified. The value of each piece of land would need to be appraised (and possibly appealed against) every few years. Does Thailand really need this additional bureaucracy? Surely it would be better to enforce existing tax law, clamping down on tax avoidance.

If there were to be a change in tax law, there would be two changes I'd think are fair: taxing unearned overseas income and a Capital Gains Tax. Neither would affect the poor adversely.

Shouldn't the owners of every piece of land already be known?

Only if the records kept by the Land-Office, Forestry-Department, Irrigation & loads of other quangos are fully up-to-date, which IME they're not always.

My nearest village for example, some 30-40 buildings/shops/restaurants/houses & two village petrol-stations, is still officially forest. This costs the more-successful owners monthly tea-money. And the officials seem curiously reluctant to progress the change-of-status of the plots of land.

Not to mention hill-tribe villages & land.

And official land-valuations are a joke, as is widely known.

Yes. So there are more reasons than just land tax to know who owns what.

[AyG]

The administrative costs of a land tax would be immense. The owners of every piece of land would need to be identified. The value of each piece of land would need to be appraised (and possibly appealed against) every few years. Does Thailand really need this additional bureaucracy? Surely it would be better to enforce existing tax law, clamping down on tax avoidance.

If there were to be a change in tax law, there would be two changes I'd think are fair: taxing unearned overseas income and a Capital Gains Tax. Neither would affect the poor adversely.

Shouldn't the owners of every piece of land already be known?

In theory yes, but in terms of finding out what an individual owns, it's very difficult. For example, there was a piece in the newspapers yesterday about how AMLO (the anti-money laundering organisation) had just seized 30 rai from Krirkkiat (the massively corrupt president of a now defunct bank) who was convicted, imprisoned and eventually died in prison in 2012. It had taken them years to track down this land he owned. The search for other land he owns goes on.

There are records, but they're not computerised, they're not always up to date (for example, if someone dies and the relatives don't bother getting the records updated), and they don't include an up to date valuation for the land.

It would be an immense task to computerise all land ownership records and then to link these to the tax system. And then you'd have to get up to date valuations for every publicly owned plot of land in the country - another immense task, and one that would undoubtedly involve massive corruption to secure artificially low valuations.

[kimamey]

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

There's a thin line between populist policies and those that help the population. Sometimes it's easy to see and sometimes it isn't.

Tax on the wealthy isn't a bad idea in itself but it depends a lot on how much, can it be assessed correctly and can it be collected. There's also the issue of collection of existing taxes and whether they are paid or not. If they're not and that can be changed then the level of tax can be lower. If they're not and the level of collection can't be improved then the higher taxes probably won't make much difference unless you're on of the ones who do pay in which case you'll be penalised.

Inheritance tax should have a lower limit on it so that it doesn't hurt the poor.

I wouldn't have thought raising VAT was populist as it will affect the lower paid most as others have said.

[kimamey]

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.

Maybe that's a problem with governments rather than taxes. Taxes are needed to run a country regardless of what the government does. Big companies can have the same problem when they're making large profits.

All tax regimes need adjusting over time so it's not always just about new taxes but rebalancing existing ones. Sometimes new ones are needed to replace outdated ones.

Whether these changes are needed I don't know. Maybe they think they'll be easier to collect from the wealthy than the existing ones.

I can't see how the VAT increase would help though.

[chotthee]

wont they all join the monkhood as you can be a billionaire with a chopper without hindrance

All registered monk in Thailand should be exempted from tax (and tax filling), as they have no financial distraction.