Thai Finance Minister Sommai insists on his land and building taxes bill

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Sommai insists on his land and building taxes bill



BANGKOK: -- The Ministry of Finance will continue to push forward its land and building tax law in order to create parity between all parties. This however, contradicts the prime minister's earlier announcement to put on hold the effort so as not to put more burden on middle income earners.

Sommai Phasee, the Minister for Finance, stated yesterday that while he is helming the ministry, he will be going ahead with plans to implement the land and building tax bill.

Mr Sommai insisted that this was to ensure equality for all taxpayers in the country.

He stated further that in comparison, revenue generated from his proposed bill is substantially greater than those collected from inheritance tax particularly from the wealthier portions of the population.

He goes on to insist that there will be no separate tax categories for residences and the land they sit on, dismissing rumours that were circulating previously.

Mr Sommai stated further that it will be anywhere between 1 – 2 years before these taxes come into effect as land appraisal for the existing 20 million land title deeds will have to be completed first.

The minister will be meeting with the National Reform Council’s tax reform committee in the beginning of April to consult on the matter

He also stated that his proposed land and building taxes bill will classify land into three categories for taxation; lands with residences, agricultural farm lands, and lands used for commercial enterprises, and vacant lands.

Taxes on lands employed for commercial purposes and unutilized land will be taxed at no more than 2%, and tax on unutilized lands will be increased every 3 years.

Land for agricultural purpose at not exceeding 0.25%, while land for living at no more than 0.5%.

Sommai stated in closing that with regards to the new land and building taxes bill, consideration will be given to not overly put burden on property owners.

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


-- Thai PBS 2015-03-24

[trogers]

Dear Minister, please look at all those unsold properties held by developers.

A law that title deeds be issued to these properties within 18 months of building/project completion would help to make them into taxable properties.

[Nuddy]

How are they going to complete the valuation of 20 million title deeded properties in the short term or ever?

[Daniel Ingalls]

Mr. Sommai, Your plan which was shelved by the PM for further study is warranted. For who is going to

appraise the property for tax purposes? Have they been trained to do such? Will it be a fair on site appraisal.

Or will it be done by mathematical equations, number of bedrooms, bathrooms etc etc. in an office? What safe guards are you going to impose to prevent bribery, corruption? Those property owners over 65, on fixed income

will be exempt? How about a husband and wife with 6 children? Will they be exempt? There is a lot to consider.

20 million pieces of property at say 200 Baht thats over 4 billion baht a year, and to increase that every three years!........What do you want to buy? A nuclear powered Aircraft Carrier? Your a very ambitious person, at the cost of the Thai taxpayer.

[Stan42]

Seeing as how many parliament members own a lot of land themselves it's obvious they're gonna do their best to avoid paying said taxes.

[pizzachang]

Mr. Sommai, Your plan which was shelved by the PM for further study is warranted. For who is going to

appraise the property for tax purposes? Have they been trained to do such? Will it be a fair on site appraisal.

Or will it be done by mathematical equations, number of bedrooms, bathrooms etc etc. in an office? What safe guards are you going to impose to prevent bribery, corruption? Those property owners over 65, on fixed income

will be exempt? How about a husband and wife with 6 children? Will they be exempt? There is a lot to consider.

20 million pieces of property at say 200 Baht thats over 4 billion baht a year, and to increase that every three years!........What do you want to buy? A nuclear powered Aircraft Carrier? Your a very ambitious person, at the cost of the Thai taxpayer.

You hit the nail with the hammer of truth! Systems that tax value(arbitrary at best) are corrupt in so many countries. A more honest system(if income is needed by government) would be a 'per rai' tax. That way, the value is set at the beginning with no possibility of select groups deciding what the value is (especially if someone in the group desires certain land) The average 50 talang wa landowner is only taxed on a subdivision of 1 rai. Taxes could only be raised per rai at 75% majority vote in full representative sessions. One final truth - once land & primary dwelling is "taxed", people no longer "own" the land they have worked and paid for(or inherited) - they are only renting from whoever decides what it is worth.

[Srikcir]

Mr Sommai is correct to push on with the land and building tax.

Prayut wants to exclude the building tax. A pure land tax does not reflect the property's total value.

With commercial property, two exactly similar properties in size and location may have the same land value but it is the different use of the property that drives the greatest value. Obviously, a vacant commercial property does not produce the same kind of income that a property with a 20-story apartment complex or shopping center produces. So why should both properties be valued the same for tax purposes?

With residential property (ie., single detached residence), two exactly similar properties in size and location may have the same land value but it is the different residence that drives the greatest value. Obviously, a one-story, two-bedroom residence will not have the same value as a three story, 5-bedroom mansion. So why should both properties be valued the same for tax purposes?

If the Thai economy contiues to collapse for the next two years when Sommai's new property taxes are implemented, taxpayers will be too financially distaught to meet the new obligations. For that the bill needs some self-correcting milestones, ie., CPI or GDP, that could trigger reductions in the new tax rates or delay of the new taxes. A progerssive tax shuold not exceed the ability (versus desire) of the taxpayer to meet their tax obligations.

[trogers]

Mr Sommai is correct to push on with the land and building tax.

Prayut wants to exclude the building tax. A pure land tax does not reflect the property's total value.

With commercial property, two exactly similar properties in size and location may have the same land value but it is the different use of the property that drives the greatest value. Obviously, a vacant commercial property does not produce the same kind of income that a property with a 20-story apartment complex or shopping center produces. So why should both properties be valued the same for tax purposes?

With residential property (ie., single detached residence), two exactly similar properties in size and location may have the same land value but it is the different residence that drives the greatest value. Obviously, a one-story, two-bedroom residence will not have the same value as a three story, 5-bedroom mansion. So why should both properties be valued the same for tax purposes?

If the Thai economy contiues to collapse for the next two years when Sommai's new property taxes are implemented, taxpayers will be too financially distaught to meet the new obligations. For that the bill needs some self-correcting milestones, ie., CPI or GDP, that could trigger reductions in the new tax rates or delay of the new taxes. A progerssive tax shuold not exceed the ability (versus desire) of the taxpayer to meet their tax obligations.

One property called home for each owner should enjoy a tax rebate. Their 2nd and more properties would not.

So, no one would be driven from their homes when the residents are earning an income.

If a home owner hits financially difficulty and cannot even afford the rebated tax, he can size down to what he can afford, eg. renting out the home and using the income to rent a cheaper place, thus creating extra income and still pay the property tax.