FPO pitches 4% land tax rate

21 กันยายน 2557, 23:00 น.

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FPO pitches 4% land tax rate

The Finance Ministry's think tank Fiscal Policy Office (FPO) has proposed to set the ceiling rate of land and buildings tax for unused land and those for commercial purpose at 4%, according to a source familiar with the issue.

For unused land alone, the rate will be doubled every three years but not exceeding the maximum level of 4% of appraised value, the source said. The maximum rates for agricultural use is set at 0.5% and residences at 1%.

In comparison, the Democrat's land and buildings draft set a maximum 0.5% tax on the appraised value of property used for commercial purposes, up to 0.1% on residences and up to 0.05% on land used for agricultural purposes. Unused land would be taxed 0.5% for the first three years before doubling every three years, but not exceeding 2%.

In a meantime, FPO director-general Kritsada Jinavijarana said the Finance Ministry is set to give a grace period of two to five years before imposing the land and buildings tax in an effort to avoid placing too great a burden on people.

The tax will initially be levied at an amount not higher than the existing house and land tax and local development tax, he said.

If a land and buildings tax bill is passed, the new tax will replace house and land tax and local development tax. But low-priced residences and land are expected to get a waiver. There was a recent proposal that residences worth less than 1 million baht should be exempted.

Land and buildings tax is among several taxes listed for implementation by the military-appointed interim government because they are viewed as instruments for narrowing economic disparity.

Local administrations are expected to earn higher income from levying the new tax, which could help ease government burden in providing financial support to them.

The Finance Ministry recently said it would not tax at the maximum rates in the first year but levies would gradually be increased.

A source earlier said local administrations are expected to raise more than 40 billion baht a year from the tax, doubling the revenue stream generated by house and land tax and local development tax. The estimate is based on an assumption of charging land and buildings tax at the middle of the highest rate.

Mr Kritsada said the FPO is poring over the details of the land and buildings tax before submitting them to Finance Minister Sommai Phasee to forward to the National Assembly Legislative for deliberation.

House and land tax, which charges 12.5% of rental payments, is blamed for tax disparity as it imposes different amounts of tax due to different rental rates even if houses are in the same area. Some landlords pass on the tax burden to tenants.

ที่มา: bangkokpost.com