Thai govt to discuss land tax reform

[Admin]

 
: 16 Apr 2010
Thai Cabinet to discuss land and building taxes

BANGKOK, April 16 (TNA) -- In a bid to prevent speculation on land and to increase tax revenue for the government, the Cabinet on Tuesday will discuss its plan to collect taxes on empty land and buildings, Finance Minister Korn Chatikavanij said Friday.

Thailand's Ministry of Finance earlier conducted studies and gathered opinions from several sectors before opting to proceed with collecting taxes, Mr Korn said.

If implemented the land tax will help promote justice in society, as taxes collected by the government presently come from personal income, value-added tax and corporate taxes while tax collection from property is still minimal.

Also, tax collection from land will assist local administrative agencies and empower them to collect and spend money for development purposes. Tax for farmers with limited land will be exempted, while only a small amount of tax will be imposed on houses used as actual residences.

However, it is expected that land owners will have to pay a substantial tax on empty or otherwise unimproved land. They are expected to pay a rising tax each year. (TNA)

[Admin]

Time for the govt to get to work on tax reform
By The Nation
2011-03-1

Close tax loopholes and ensure fair rates and collection to provide a sustainable basis for greater equality

The Abhisit government may now be looking toward the general election but it can do a great service to Thailand if it can lay down a concrete path for tax reform before it dissolves Parliament. After all, tax reform is what the government has been touting all along - claiming that such reform can ensure Thailand will enjoy fiscal stability in the future.

The government has talked about the idea of tax reform for a long time but no substantive effort has been made to fulfil the promise. Let's hope that a recent meeting between the Finance Ministry and the Thailand Development Research Institute (TDRI) - in which TDRI President Nipon Poapongsakorn called for effective tax reform - will lead to another push for action. If there is no concrete effort to address the issue of tax reform, Thailand may be left vulnerable to another fiscal crisis in the future.

Reasonable tax collection should be able to help address social and economic inequality. The corporate and personal income tax rates should be adjusted to help promote investment and consumption. However, the current tax system has been lenient on some, especially the well-off, while tax collectors try to squeeze payments from low-income earners and salaried workers.

For instance, the Thai estate tax has not been effective in collecting tax from the wealthy on the property they own. A series of tax deductible measures also provides unnecessary benefits for the wealthy, such as deductibles on long-term investment funds on the stock market.

The current system provides a number of loopholes that people exploit to avoid paying tax. These loopholes can be reflected in the relatively small number of taxpayers in Thailand. Currently, 26 million people are of working age, but just 10 million pay personal income tax. Both rich people and small-business entrepreneurs, such as vendors, avoid paying taxes in spite of their income levels.

The current system does not contribute to the effort to address this inequality. Rather, it provides greater privilege for those who have access to opportunity. For instance, the reasonable property tax should have promoted more efficient use of property. But now, some landlords are encouraged to acquire more property without utilising it. They simply wait to sell when property prices go up, because they are not subject to appropriate charges for land and property assets.

Tax reform should be used to help maintain the country's fiscal stability now that the Abhisit government has spent an increased amount of money on the public welfare system. At the moment, our tax money is being spent to subsidise fuel prices, electricity bills and the public transport system, among other populist measures - all designed to get the government re-elected at the next election. The Abhisit government's "Pracha Wiwat" populist measures have indeed raised concern over future fiscal stability.

The government has to ensure sustainable financial resources to support its spending. Public spending on social services and welfare has increased greatly in the past few years. For instance, in fiscal year 2010, public healthcare spending amounted to Bt89 billion, a figure that has increased to Bt101 billion under the current budget. Public healthcare spending has risen from Bt1,300 per person in 2003 to Bt2,490 today.

The government's policy to provide free education for 15 years will cost Bt80 billion annually. Welfare spending for the elderly will certainly increase along with the size of the elderly population, which will increase from 11 per cent of the population now to 22 per cent within 20 years.

While some of these policies may be beneficial to certain sections of the population, they require a sustainable policy plan to ensure a continued source of revenue. Increased revenue from effective and fair tax collection should help the government promote public investment in other areas such as education.

Tax reform should enable the Finance Ministry to achieve its target of balancing the budget within five years, because it will draw more tax revenue into the country's coffers. Taxpayers do not mind paying reasonable rates if their tax money is spent to benefit the country in a sustainable manner by promoting welfare benefits for the needy and addressing the income gap between the haves and the have-nots.

[Admin]

New Thailand land tax bill progress 
Bangkok Post: 5 Apr 2011

Land tax progress

The long-awaited land and building tax bill will be among the first to be deliberated by the new House of Representatives now that the Cabinet and the Council of State have given it a green light.

According to Finance Minister Korn Chatikavanij, the bill, which will most affect people having plenty of idle land and properties, will be put on parliamentary agenda before the current parliamentary meeting session ends on April 28 this year.

The bill is designed to reduce social inequality as 10% of the population own more than 100 rai of land each while 90% own less than one rai.

http://www.bangkokpost.com/business/economics/230350/land-tax-progress
 

[isanbirder]

10% own more than 100 rai each?  That can't be right.