Thai Finance Minister Sommai pushes on with land and building taxes bill

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Sommai pushes on with land and building taxes bill



BANGKOK: -- The finance minister remains adamant to the much criticised land and buildings tax bill with attempt to push it forward for the ministry's tax reform committee to endorse this week before going to the cabinet for approval.

The latest action by Finance Minister Sommai Phase came even as Prime Minister Gen Prayut Chan-o-cha has agreed to hold back the bill on realisation of its massive impact on low income earners, and current economic slowdown.

But the finance minister emotionally warned that Thailand will become mired in fiscal woe if the land and buildings tax fails to materialise.

Sommai said the country is in need of enough budget to improve the education and healthcare systems.

But the opportunity to seek a new source of revenue is difficult if the current government does not push tax reform, he said.

He said it is hardly possible for elected government to pass such tax law as its popularity will be jeopardised in doing so.

The latest updated bill would be proposed to the Finance Ministry’s committee tasked with tax reform this week and will be put for deliberation at a forum of academics in the next couple of weeks, he said.

Sommai admitted that he was upset when Thais many Thais are so selfish about paying tax.

“How can the country grow if all Thais are selfish, especially middle income earners?” he said.

The land and buildings tax is among the government’s priorities, seeking to narrow gap between the rich and the poor, and to boost the government’s revenue stream in the future.

Based on the ministry’s recent proposal, homeowners would be charged 0.1% of appraised value. Land for agricultural and commercial use would be taxed at 0.05% and 0.2%, respectively.

House with an appraised value of up to 2 million baht will receive a 75% tax allowance, translating into a 250-baht tax payment for every 1 million.

House with an appraised value of 2-4 million baht will receive a 50% tax allowance, with house owner liable to pay 500 baht for every 1 million on amounts exceeding 2 million but no more than 4 million.

For house with an appraised value of more than 4 million baht, owner must pay tax in full at 1,000 baht for every 1 million for amounts exceeding 4 million.

Sommai said he didn’t see any other tax rather than the land and buildings tax from which the government can collect significant revenue.

He said the present local development tax and house and land tax have generated just above 20 billion baht a year due to the high number of exemptions and loopholes that allow people to avoid payment.

If the land and buildings tax takes effect, it will contribute about 200 billion baht a year to state coffers, he stated earlier.

Source: http://englishnews.thaipbs.or.th/sommai-pushes-on-with-land-and-building-taxes-bill


-- Thai PBS 2015-03-17

[trogers]

Would developers be liable to pay taxes on their unsold units? Close this loophole fast.

Then we would see more efficiency in the property market, ie. Demand = real demand, and not speculation.

[JOC]

“How can the country grow if all Thais are selfish, especially middle income earners?” he said.>>Quote

So all the super rich with landholdings in excess of 100.000 rai are lining up to pay their taxes??

No I didn't think so.............

[trogers]

How can the country grow if all Thais are selfish, especially middle income earners? he said.>>Quote

So all the super rich with landholdings in excess of 100.000 rai are lining up to pay their taxes??

No I didn't think so.............

No. We don't have super rich in Thailand. Only rich drivers, maids, guards, etc.

[Strangebrew]

Did I read this right it seems the left hand don't know what the right hand is doing or is it a case of the afore mentioned person is unable to read? Could be drunk with power.

[casualbiker]

Did I read this right it seems the left hand don't know what the right hand is doing or is it a case of the afore mentioned person is unable to read? Could be drunk with power.

Or the minister knows this has to be done now or it never will!

[cigar7]

Will condos also be taxed?

[cmsally]

This sounds more like , the govt is desperately broke.

[trogers]

Will condos also be taxed?

It's real property, so taxable.

[Pib]

Appears the Finance Minister didn't hear what the PM said last week. Expect the Finance Minister will try his best (to save face) to push the bill to the cabinet for consideration where the cabinet will vote to shelve it for further study like the PM said last week...see this Nation article from last week regarding the PM shelving the proposed tax for further study: Link.

Edited March 17, 2015 by Pib

[Enoon]

Appears the Finance Minister didn't hear what the PM said last week. Expect the Finance Minister will try his best (to save face) to push the bill to the cabinet for consideration where the cabinet will vote to shelve it for further study like the PM said last week...see this Nation article from last week regarding the PM shelving the proposed tax for further study: Link.

The General "opposed" the bill in public (knowing full well that it was going through) in order to look like "the friend of the poor", leaving the minister to look like the bad guy.

His next statement will say something like " i am not going to veto this because I'm not a D******** and we we should trust our ministers to do what is best for the people".

Nice work PR team.

Edited March 17, 2015 by Enoon

[Pib]

Appears the Finance Minister didn't hear what the PM said last week. Expect the Finance Minister will try his best (to save face) to push the bill to the cabinet for consideration where the cabinet will vote to shelve it for further study like the PM said last week...see this Nation article from last week regarding the PM shelving the proposed tax for further study: Link.

The General "opposed" the bill in public (knowing full well that it was going through) in order to look like "the friend of the poor", leaving the minister to look like the bad guy.

His next statement will say something like " i am not going to veto this because I'm not a D******** and we we should trust our ministers to do what is best for the people".

Nice work PR team.

Naw, the bill will be shelved if it reaches the cabinet for consideration. And even if it got by the cabinet, even the NLA yes men will let it fester in review until the next govt comes in...then all bills that were still in review have to start all over if the new govt supports it.

[tomacht8]

...... the ministry's tax reform committee to endorse this week .....

Always this ill-considered populist quickly shots.
Over 85% of the land in Thailand are not even measured, and equipped with GPS land papers.
Where should come at once all the experts from, to make the assessment / valuation of the houses?
Is the whole land taxation system ever supported with computer technology?

Thailand's politics are world champions of new ideas.

Every day three new ideas.

In the implementation unfortunately, they are often fail.

[Daniel Ingalls]

I can't believe anything this forum puts out. One day land tax is on, then its off, then its on, then its off....make up your mind,,, this is making everyones nerves on edge. If the PM said he's going to shelve it, the Finance Minister should do the same.

[bob4you]

The Thai's will never agree to pay more money out of pocket, they want a free ride, let the others pay. Thailand is one of the few countries I know of with no property taxes.

[lvr181]

“How can the country grow if all Thais are selfish, especially middle income earners?” he said." So we will also punish low income earners and we know that high income earners are not selfish at all and will support higher taxes because they can afford it?? And steam rollers roll steam? Hens do have teeth? And ostriches never have their heads in the sand either! And if you wear rose tinted spectacles, all is well in the world?

[Pib]

I think a Prime Minister trumps a Finance Minister.

[Prbkk]

Will condos also be taxed?

Yes, but at a very low rate...something like 2000B per annum per 10,000,000 valuation if the chart in saturday's BP is correct....and many at the lower values( ie outside Bangkok) not taxed at all. But in this climate of yes, no, maybe, yes...who really knows?

[MaxLee]

"Sommai pushes on with land and building taxes bill"

In other words: "I want my money, money, money!!!!!"

[orange31]

The main problem as we all know is that so much money gets put into peoples pockets and not spent on the right things.

I think this tax is a good idea (and it will affect me), but it makes me feel sick to think that it's my money going into the government feeding trough. I'm sure there are rich influential people who will try to stop this happening, let's see if they will succeed. Or they'll exempt themselves somehow.

He mentioned about loopholes, why not just close those up first?

[chondan]

Why has this been done long ago. I pay tax. I have to show a tax release at the airport. Why can't Thais that make money pay taxes? That is what builds roads and improves schools. Rich bitch, poor get poorer.

[Robert24]

this tax won't happen. It's dead.

[trogers]

...... the ministry's tax reform committee to endorse this week .....

Always this ill-considered populist quickly shots.

Over 85% of the land in Thailand are not even measured, and equipped with GPS land papers.

Where should come at once all the experts from, to make the assessment / valuation of the houses?

Is the whole land taxation system ever supported with computer technology?

Thailand's politics are world champions of new ideas.

Every day three new ideas.

In the implementation unfortunately, they are often fail.

So over 85% of the land cannot be bought and sold as no value can be ascertained nor tax be computated?

[Srikcir]

These bills were the right thing to do to increase the nation's budget to help finance the myriad cash handouts, subsidies, and off-budget items Prayut keeps giving to quell protesters. Also, Sommai was ordered by Prayut to develop such new taxes and he's delivered. The land and building taxes could use some further tweaking to make them more palatable such as a longer phase in period or "grandfather" clauses that new taxes would only apply to new real estate purchases as of July 1, 2015.

UNFORTUNATELY ....

When Prayut tasked Sommai for new taxes last year, Prayut was perhaps under some illusion of his economic prowness to predict 3-4% GDP growth in 2014 and 4% in 2015. These taxes would have been justified to slow such inflation. The only blame Sommai should bear is taking too much time to propose the taxes. It's not like he or Prayut had to consider public opinion or opposition in the NLA.

Now it's clear that GDP growth in 2014 was almost nonexistent and 2015 at best will show only a meager increase. The economy is in a tailspin towards deflation with an increasing cost of living and higher personal debt. Higher taxes now will only further damage Thai's ability to increase personal consumption that is about the only economic factor left to contribute to GDP growth after tourism.

Rather than taking responsibility for the deteriorating economy (the worse since the floods of 2011) in 2014 and 2015 that would have not justified more taxes, Prayut chose to blame Sommai for inappropriate taxes. Some say a good general rides in front of his soldiers going into battle. General Prayut seems to lurk behind his soldiers when the charge is made.

[halloween]

These bills were the right thing to do to increase the nation's budget to help finance the myriad cash handouts, subsidies, and off-budget items Prayut keeps giving to quell protesters. Also, Sommai was ordered by Prayut to develop such new taxes and he's delivered. The land and building taxes could use some further tweaking to make them more palatable such as a longer phase in period or "grandfather" clauses that new taxes would only apply to new real estate purchases as of July 1, 2015.

UNFORTUNATELY ....

When Prayut tasked Sommai for new taxes last year, Prayut was perhaps under some illusion of his economic prowness to predict 3-4% GDP growth in 2014 and 4% in 2015. These taxes would have been justified to slow such inflation. The only blame Sommai should bear is taking too much time to propose the taxes. It's not like he or Prayut had to consider public opinion or opposition in the NLA.

Now it's clear that GDP growth in 2014 was almost nonexistent and 2015 at best will show only a meager increase. The economy is in a tailspin towards deflation with an increasing cost of living and higher personal debt. Higher taxes now will only further damage Thai's ability to increase personal consumption that is about the only economic factor left to contribute to GDP growth after tourism.

Rather than taking responsibility for the deteriorating economy (the worse since the floods of 2011) in 2014 and 2015 that would have not justified more taxes, Prayut chose to blame Sommai for inappropriate taxes. Some say a good general rides in front of his soldiers going into battle. General Prayut seems to lurk behind his soldiers when the charge is made.

"only apply to new real estate purchases as of July 1, 2015."

So by the time the next government is elected, the revenue raised will be almost nothing, and they can justifiably can it? And all the real estate in possession of the wealthy remains untaxed until they sell it, which may be never?

[ldiablo]

Hey Mr. Finance minister. What is your net worth? You're upset because many Thai's are selfish. Maybe they are genuinely poor and will find it difficult with all these stinking taxes. I don't agree one bit with paying more taxes on land people have already purchased. Taxes are nothing more than a money grab. People pay enough taxes as it is. Down with taxes. People pay taxes on their salaries, taxes on food,gas every god damn thing around we pay taxes for,and I'm not just talking in Thailand.

[casualbiker]

Hey Mr. Finance minister. What is your net worth? You're upset because many Thai's are selfish. Maybe they are genuinely poor and will find it difficult with all these stinking taxes. I don't agree one bit with paying more taxes on land people have already purchased. Taxes are nothing more than a money grab. People pay enough taxes as it is. Down with taxes. People pay taxes on their salaries, taxes on food,gas every god damn thing around we pay taxes for,and I'm not just talking in Thailand.

Taxes are what pay for every god damn thing around.. Hospitals, schools, roads, railways etc etc.. Only about 20% of Thais pay tax on earnings compared to other countries were it's much higher!

Not forgetting this tax would be 250baht A YEAR for a house worth up to 1 million baht.. a year, not per month!

68 satang a day (3 US cents...2 UK pence)

Although I agree many taxes are to high in other countries. This one seems to be about right!

Edited March 18, 2015 by casualbiker

[alantheembalmer]

Hey Mr. Finance minister. What is your net worth? You're upset because many Thai's are selfish. Maybe they are genuinely poor and will find it difficult with all these stinking taxes. I don't agree one bit with paying more taxes on land people have already purchased. Taxes are nothing more than a money grab. People pay enough taxes as it is. Down with taxes. People pay taxes on their salaries, taxes on food,gas every god damn thing around we pay taxes for,and I'm not just talking in Thailand.

Taxes are what pay for every god damn thing around.. Hospitals, schools, roads, railways etc etc.. Only about 20% of Thais pay tax on earnings compared to other countries were it's much higher!

Not forgetting this tax would be 250baht A YEAR for a house worth up to 1 million baht.. a year, not per month!

68 satang a day (3 US cents...2 UK pence)

Although I agree many taxes are to high in other countries. This one seems to be about right!

If what you say is correct, (and I have no reason to doubt it), in many, many cases collecting the tax will cost more than the amount billed.

[ldiablo]

Casualbiker. Railways are paid by fares purchased, hospitals are paid for by patients bills,roads are paid for by gas taxes. If a person doesn't have children or sends them to a private school why should they be forced to pay for another persons child to attend a government school. All I'm saying is that people pay too many taxes. You buy a new car you pay tax, you sell that car to another person and guess what ,they pay tax on an item that was already taxed and it goes on and on and on.

[trogers]

Casualbiker. Railways are paid by fares purchased, hospitals are paid for by patients bills,roads are paid for by gas taxes. If a person doesn't have children or sends them to a private school why should they be forced to pay for another persons child to attend a government school. All I'm saying is that people pay too many taxes. You buy a new car you pay tax, you sell that car to another person and guess what ,they pay tax on an item that was already taxed and it goes on and on and on.

Ahhh...you would be one of those who own a condo unit on the 2nd floor and refuse to pay for servicing the elevator because you don't use it.