PM Prayut shelves land tax

[webfact]

PM shelves land tax
THE NATION

Impact of current economic situation on low-income earners cited as reason; agencies to study long-term effects

BANGKOK: -- PRIME MINISTER Prayut Chan-o-cha yesterday slammed the brakes on the proposed land and building tax to help prevent an adverse impact on lower-income earners, the government spokesman said.

While chairing yesterday's meeting of the government's policy implementation committee, the prime minister ordered a delay in implementing the land and building tax, Government Spokesman Yongyuth Mayalarp told reporters at Government House.

He said the prime minister had instructed relevant state agencies to study further the long-term impacts of the proposed bill on the public, particularly on those from lower income groups. Prayut pointed to the ongoing economic situation and concluded that the current time was not suitable for implementation of the proposal, according to the spokesman.

"The prime minister wants the law to be delayed. Implementation of the law must not affect the people in the future. It depends on the economic situation how long the proposed bill will be postponed," Yongyuth said.

He said that postponement of the tax had nothing to do with the criticism the proposal has provoked.

The spokesman said the delay in the tax would allow relevant agencies to study further the matter in order to determine a suitable measure in the future.

He said the Finance Ministry's permanent secretary had been assigned to lead the study that would focus on the tax structure in general and tax reform in a way that is suitable for the future.

No exact time frame has been set for completion of the study, according to the spokesman.

Yesterday's move surprised the stock market even though the latest draft of the tax bill had been relaxed and came with more exemptions and allowances.

Under the draft bill, land for agricultural purposes would be subject to a maximum 0.25-per-cent tax, residential property 0.5 per cent, and commercial property 2 per cent. Unused or vacant land would be charged at a progressive rate every three years, not exceeding 2 per cent of appraised value.

However, there would be a two-year grace period before the land and household tax replaced the municipal tax, which is currently in use.

Exemption from the new tax is likely to be sought from the Cabinet in the next two weeks for homes worth less than Bt2.5 billion, up from the earlier proposed Bt1.5 million.

Homes worth between Bt1.5 million and Bt5 million will be given a 50-per-cent allowance on the tax rate, translating into a tax of Bt2,500 a year. Also, home-owners aged 60 and above will be exempted from tax.

Source: http://www.nationmultimedia.com/politics/PM-shelves-land-tax-30255920.html


-- The Nation 2015-03-13

[Rod Wallop]

Doesn't this benefit the rich, who have millions in land just sitting doing nothing?

[bkkcanuck8]

Doesn't this benefit the rich, who have millions in land just sitting doing nothing?

In a corrupt system, the rich usually don't pay. I can just see the land being reclassified as being used for farming.... and all they did was hire one person to plant and tend to a few plants. Land / property taxes always tend to push people off of land once they can no longer keep up with payments (lots of property comes up for auction in Canada and the US because of back taxes not paid.... the rich would have paid or sold).

[daoyai]

Easy to not impact the poor, give them an exemption up to a certain value for primary residence and or ag plots up to a certain size. ... this latest development does seem to favour the "elite".

[bangkokheat]

good idea prayut, if you want more money then look at the efficiency of your government, and the rich who dont pay

[trogers]

Just increase VAT to 10%. Affects everyone equally, right?

[taff33]

I would think that the 'poor Thais' don't own houses over 1 mill.

[trogers]

I would think that the 'poor Thais' don't own houses over 1 mill.

But poor proxies do, perhaps hundreds of millions. Recall those guards, drivers, maids as stockholders?

[RadKiter]

Just increase VAT to 10%. Affects everyone equally, right?

That would be a third world policy for a developing country that already has to much disparity in distribution of wealth and income.

[aripengu]

He said that postponement of the tax had nothing to do with the criticism the proposal has provoked.

[darren84310]

Doesn't this benefit the rich, who have millions in land just sitting doing nothing?

In a corrupt system, the rich usually don't pay. I can just see the land being reclassified as being used for farming.... and all they did was hire one person to plant and tend to a few plants. Land / property taxes always tend to push people off of land once they can no longer keep up with payments (lots of property comes up for auction in Canada and the US because of back taxes not paid.... the rich would have paid or sold).

Totally agree... this would have benefitted the rich as they buy the land off the people who can't pay the taxes at knock down rates.

[RadKiter]

He said that postponement of the tax had nothing to do with the criticism the proposal has provoked.

[LuckyLew]

How about making a minimum threshold for taxes?

Say if your total value of land / buildings is less than 5 million ... no taxes

[trogers]

How about making a minimum threshold for taxes?

Say if your total value of land / buildings is less than 5 million ... no taxes

Let me guess. You own a property valued between Bt2.5 -5.0m.

[tonypace02]

Just increase VAT to 10%. Affects everyone equally, right?

Not at all. The wealthy spend less than 20% of their wealth on taxable essentials, while lower income people might spend 90% of their income on essentials. The wealthy can recover their losses through the VAT by investing their excess income. The poor do not have that advantage.

[Robby nz]

Just increase VAT to 10%. Affects everyone equally, right?

No.

It affects those who have less money for the rich can handle price rises without any problems while the poor and middle income people who are struggling now, particularly those with debt, will find the things they need will rise in price leaving them with even less, and in many cases deeper in debt.

[kaorop]

Just increase VAT to 10%. Affects everyone equally, right?

just hurts the poor more

I think Prayut got a memo, "hey we got to much land and dont want this okay, thanks mate, see you friday at the pub, the whole gang is coming"

[Daniel Ingalls]

What I been saying all along, this isn't going to happen. Leave it as it was. Dig deep into the pockets of lower ministers

and their managers. There is sure to be funds hidden within their set budgets to recoup for other things in his wish list.

[irwinfc]

i'm totally shocked by this turn of events! i absolutely didn't see this coming! NOT!

[cmsally]

All part of being seen to "return" happiness - or rather back to status quo.

However I was thinking about this last night. A number of reasons why its a bad idea but a major one being that a lot of families still live on a communal compound/plot. In a lot of cases this has not been divided. Would cause them enormous problems if a land tax due. A lot of the land is worth a lot but most members of the family not high earners.

[manarak]

Just increase VAT to 10%. Affects everyone equally, right?

nope, it affects primarily the lower half of society

[lifeincnx]

Just increase VAT to 10%. Affects everyone equally, right?

Which is in the works.

[maidee]

i think this guy has adhd

he talks & talks about thinks he knows nothing about, without even thinking

[trogers]

Just increase VAT to 10%. Affects everyone equally, right?

nope, it affects primarily the lower half of society

What they do not know will not hurt them. I am surprised that even some foreigners here think increasing VAT affects the poor less than a land tax.

[Thaddeus]

You load sixteen tonnes and what do you get.

But, own sixteen tonnes, and you're ok.

[Cpkt8]

Too much pressure from the ultra rich and influential ones..

The government should try to source revenue from those people and help the poorer ones. Unfortunately the most or all of the officials being part of the payroll from the rich and influential ones.

[Anony]

Just increase VAT to 10%. Affects everyone equally, right?

nope, it affects primarily the lower half of society

What they do not know will not hurt them. I am surprised that even some foreigners here think increasing VAT affects the poor less than a land tax.

That isn't surprising at all to me!

In the US Fox "news" & co tries to sell a federal VATsystem under the brilliantly designed "Fair Tax" name.

It would codify the curent statusquo that the people who own only 3% of the country's wealth pay the 97% of the taxes. And people think that it IS fair.

So why not in Thailand!?

They are not better at math neither are they?!

[cmsally]

How about streamlining the efficiency of the government machine. Lots of people in government offices doing .... all.

[bill1369]

Just increase VAT to 10%. Affects everyone equally, right?

Actually: NO!!!

[Docno]

A cynical person would suggest that this whole thing was a setup from the start to make Prayuth look like a champion to the poor (and in fact, to everyone who would have been affected). I wonder if such a proposal would have gotten so far down the road (revealed to the media) without the good General being well aware of it. Once it's out there, he can use his singular power to flush it away and come out the hero.

I try not to be cynical ... it's not good for the health.