PM Prayut shelves land tax

[Nickhick]

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

. Make the consumer pay its a good way...

[Anony]

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.

I thing you way overestimating the IQ of some! (by about 100)

And I who think that G. W. Bush was the most intelligent president of the US of A say that.

555

[rockingrobin]

The PM recently stated that the land tax was necessary to fund Infrastructure projects

Pleading for public understanding, the prime minister explained that the government would need funding to implement several infrastructure projects and if it could not collect enough taxes such projects would not be possible.

So are we to assume these will now be shelved, or an alternative funding sourced

[Docno]

A similar thing happened a few months back when Prayuth unilaterally rejected a proposed alcohol ban for New Years. Exact same script. Government committee/body makes a proposal, it is announced publicly, the public is (predictably) unhappy about it, and the good General rejects it outright.

I've said it before: it does amaze me how much unaccountable power seems to be in the hands of one man (not that I disagree with these decisions).

[Thai at Heart]

To save the poor.

hahaha. this man is so duplicitous it is pathetic.

[bkkcanuck8]

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.

Actually not. It was Prayut that pushed it in the first place (at least that is what I remember), then you have opposition from PTP, then from Abhisit.... then it is withdrawn. Then you have Prayut trying to pretend it was not because of pressure from those pesky former politicians. This one he does not come out of looking that good.

[lucky11]

The military dictator may have all the guns and political power at the moment, but he knows where his bread is buttered. He must have gotten too much flak from the greedy wealthy elite to stick to his guns on this one. Taxing land, where the wealthy in Thailand hide much of their booty, is a good long term policy for Thailand but Dictator Pryut doesn't have the backbone to go up against the handful of families in Thailand that own most everything.

Actually, he is thinking more about the poorer citizens rather than the rich.

Lesson for Yingluck - if you are chairperson of a committee go to the meetings to find out what is going on.

Lesson 2.) If experts and qualified people tell you that a policy that you implemented is going dramatically wrong and is encouraging rampant corruption and will incur massive losses then terminate it forthwith

Lesson 3.) If you are told that something that you are doing goes against the constitution then don't ignore that advice and carry on with it (even if a family member has given bum advice to do so).

She won't be involved in politics again, but if she had had a modicum of common sense she wouldn't be facing the prospect of prison!!!

Prayuth might be a novice when it comes to politics but he has soon learnt how to do the job and has become a hardened politician in less than a year - Yingluck had about the same amount of experience as Prayuth initially (none), but in a little under 4 years she never made it past being a glorified figurehead and she wasn't very good at that either!!!

[lvr181]

Is there a "popularity" contest going on in Thailand among politicians? Looking forward to coming elections (and happiness of Thai peoples) some time in the future?

Why cannot the PM and his advisers look outside of their own country at another modern society to see how they run a good economy, collect and distribute taxes, make and enforce laws and a democratic system not bogged down with layers of government. A country that has looked outside of its own boundaries to adopt systems that can be modified to suit their own needs? And has introduced far reaching legislation, sometimes ahead of the rest of the world.

Is the current Thai government (and those before) acting like ostriches? Not willing to learn from others (sounds a bit like USA or Australia et al)?

I would nominate the country of New Zealand. Modern society commenced in 1840 - only 175 years old and streets ahead, in terms of social justice of far older cultures e.g.Thailand.

NO, I do not live in NZ but nearby.

[Srikcir]

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

No, VAT does not affect everyone equally. It is not progressive like an income tax. VAT is more like a flat income tax. It puts everyone in the same tax rate regardless of their economic sistuation, especially if unemployed.

The wealthy may pay higher VAT in terms of baht but in terms of percentage of income, they pay less. Wealthy have more discretionary income than lower income classes and can chose not to make high dollar purchases or choose to defer high dollar purchases. They may also be able to leverage combined purchase for discounts becaue of higher values of purchase involved.

Lower income classes have little option to avoid or minimize VAT and will pay the same tax rate on almost every purchase.

[bkkcanuck8]

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

No, VAT does not affect everyone equally. It is not progressive like an income tax. VAT is more like a flat income tax. It puts everyone in the same tax rate regardless of their economic sistuation, especially if unemployed.

The wealthy may pay higher VAT in terms of baht but in terms of percentage of income, they pay less. Wealthy have more discretionary income than lower income classes and can chose not to make high dollar purchases or choose to defer high dollar purchases. They may also be able to leverage combined purchase for discounts becaue of higher values of purchase involved.

Lower income classes have little option to avoid or minimize VAT and will pay the same tax rate on almost every purchase.

Depends on what the VAT covers..... Does the VAT cover food and transit (buses) and low cost rental? It also depends on whether the government issues a tax reimbursement to those that are low income. There are lots of ways to structure VAT. I would argue though it would be a better replacement for business income tax. Whether a business pays tax after charging the customer, or it is charged at the register ... it still comes from the buyer in the end. You can make your businesses much more competitive when it comes to exports since VAT is typically not collected on exports, which makes businesses more competitive and in the end will likely provide more jobs which means more income to the country and its citizens through jobs. Countries are complaining that corporations are structuring income to pay in low tax nations.... this would eliminate this problem because you tax all sales internally not to mention imports from other countries are treated the same (whereas now imports from foreign countries do not pay income tax.... in the country where it is sold).

Edited March 13, 2015 by bkkcanuck8

[yellowboat]

The iron fist weilding the rubber stamp should allow political parties sort out Thailand's taxation.

[khunken]

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

No, VAT does not affect everyone equally. It is not progressive like an income tax. VAT is more like a flat income tax. It puts everyone in the same tax rate regardless of their economic sistuation, especially if unemployed.

The wealthy may pay higher VAT in terms of baht but in terms of percentage of income, they pay less. Wealthy have more discretionary income than lower income classes and can chose not to make high dollar purchases or choose to defer high dollar purchases. They may also be able to leverage combined purchase for discounts becaue of higher values of purchase involved.

Lower income classes have little option to avoid or minimize VAT and will pay the same tax rate on almost every purchase.

Depends on what the VAT covers..... Does the VAT cover food and transit (buses) and low cost rental? It also depends on whether the government issues a tax reimbursement to those that are low income. There are lots of ways to structure VAT. I would argue though it would be a better replacement for business income tax. Whether a business pays tax after charging the customer, or it is charged at the register ... it still comes from the buyer in the end. You can make your businesses much more competitive when it comes to exports since VAT is typically not collected on exports, which makes businesses more competitive and in the end will likely provide more jobs which means more income to the country and its citizens through jobs. Countries are complaining that corporations are structuring income to pay in low tax nations.... this would eliminate this problem because you tax all sales internally not to mention imports from other countries are treated the same (whereas now imports from foreign countries do not pay income tax.... in the country where it is sold).

You are correct. Normally I'd be against a VAT increase but not if it is structured to impose no VAT on most necessities for the poorer sector of the population.

Even now there are many items that have a zero VAT rate: food, education, public transport, some clothing and small items like soap, razors & a selection of household implements.

It would be far easier to impose as the cost of running the land tax with all its exceptions, rates & loopholes - not to mention nation-wide valuation of every small piece of land - is high.

[Rancid]

I'm the West we buy land and assume we own it, however then we have to keep paying ever increasing tax on that land. If you don't pay the tax they can take the land off you to recoup it.

Essentially after buying the land you never really own it, as you have to pay a yearly rent/tax. It is an insidious tax, when governments inevitably get short on money the tax goes up.

Delighted Thailand isn't going ahead with it. For renters it just gets passed along to them so no winners except wasteful governments.

[MaxLee]

Shelve it and rug it under the table. Better than losing international face

[trogers]

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

No, VAT does not affect everyone equally. It is not progressive like an income tax. VAT is more like a flat income tax. It puts everyone in the same tax rate regardless of their economic sistuation, especially if unemployed.

The wealthy may pay higher VAT in terms of baht but in terms of percentage of income, they pay less. Wealthy have more discretionary income than lower income classes and can chose not to make high dollar purchases or choose to defer high dollar purchases. They may also be able to leverage combined purchase for discounts becaue of higher values of purchase involved.

Lower income classes have little option to avoid or minimize VAT and will pay the same tax rate on almost every purchase.

Depends on what the VAT covers..... Does the VAT cover food and transit (buses) and low cost rental? It also depends on whether the government issues a tax reimbursement to those that are low income. There are lots of ways to structure VAT. I would argue though it would be a better replacement for business income tax. Whether a business pays tax after charging the customer, or it is charged at the register ... it still comes from the buyer in the end. You can make your businesses much more competitive when it comes to exports since VAT is typically not collected on exports, which makes businesses more competitive and in the end will likely provide more jobs which means more income to the country and its citizens through jobs. Countries are complaining that corporations are structuring income to pay in low tax nations.... this would eliminate this problem because you tax all sales internally not to mention imports from other countries are treated the same (whereas now imports from foreign countries do not pay income tax.... in the country where it is sold).

You are correct. Normally I'd be against a VAT increase but not if it is structured to impose no VAT on most necessities for the poorer sector of the population.

Even now there are many items that have a zero VAT rate: food, education, public transport, some clothing and small items like soap, razors & a selection of household implements.

It would be far easier to impose as the cost of running the land tax with all its exceptions, rates & loopholes - not to mention nation-wide valuation of every small piece of land - is high.

Where did you buy consumables without VAT? I would understand when you buy products directly from farms.

[BestBitterPhuket]

Make an exemption for the poor. Can easily be implemented. Tax the rich because they can take it.

[trogers]

Make an exemption for the poor. Can easily be implemented. Tax the rich because they can take it.

So, should the govt seal be tattooed on the foreheads of the poor or the rich?

[ChiangraiTony]

From my understanding the banks were complaining since they hold many. Taxing these would have an adverse affect.

[trogers]

From my understanding the banks were complaining since they hold many. Taxing these would have an adverse affect.

Holding many what? Foreclosed properties?

The key action word is "Fire Sales". Or are they planning to hold them for the boss's grandkids?

[bkkcanuck8]

From my understanding the banks were complaining since they hold many. Taxing these would have an adverse affect.

I wonder if they hold it due to foreclosure or if they hold property in trust to get around ownership restrictions.

Banks holding enough property like this for this to cause problems may indicate the banks may not be in the best shape.