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[ 2015-03-06 ]
Sommai firm on land/construction tax
Finance Minister Sommai Phasee vowed yesterday that the draft land and construction tax bill would be finalised in two weeks and forwarded to the Cabinet.
"If I still hold this position, I insist on going ahead with the tax collection. If we don't do it, how will the country be reformed" he said.
The Finance Ministry was rushing to review the legal draft in detail, particularly the tax ceiling and rates, and deductions.
He insisted that, while he is in the office, the proposed tax would be levied on land and buildings, given its contribution to the country's economic reform.
Now the Finance and Interior ministries are working together to reform the tax system, he said.
After the real estate tax takes effect, the Interior Ministry has to cancel two of its laws for land and household tax and municipal tax.
Under the draft bill, land for agricultural purposes will be subject to a maximum 0.25-per-cent tax, residential property to 0.5 per cent and commercial property to 2 per cent.
Idle or vacant land will be charged at a progressive rate every three years up to 2 per cent of appraised value.
The grace period for enforcement has been set at two years. This tax will replace the existing land and household tax and municipal tax.
The maximum rates still stand as under the draft bill, but the real tax collected may be lower than the maximum.
The Finance Ministry was rushing to review the legal draft in detail, particularly the tax ceiling and rates, and deductions.
He insisted that, while he is in the office, the proposed tax would be levied on land and buildings, given its contribution to the country's economic reform.
Now the Finance and Interior ministries are working together to reform the tax system, he said.
After the real estate tax takes effect, the Interior Ministry has to cancel two of its laws for land and household tax and municipal tax.
Under the draft bill, land for agricultural purposes will be subject to a maximum 0.25-per-cent tax, residential property to 0.5 per cent and commercial property to 2 per cent.
Idle or vacant land will be charged at a progressive rate every three years up to 2 per cent of appraised value.
The grace period for enforcement has been set at two years. This tax will replace the existing land and household tax and municipal tax.
The maximum rates still stand as under the draft bill, but the real tax collected may be lower than the maximum.
The Nation March 6, 2015 1:00 am
"Normally, we will fix the real estate tax to be not over the normal payment for the current taxes, which include the household tax and municipal tax," he said.
After the grace period, the real estate tax will be gradually implemented. In the third year, taxpayers will pay only 50 per cent of the required tax from the act, and in the fourth year, only 75 per cent.
"Taxpayers will pay following the act's requirement in the fifth year after the act has been effective. I believed it's fair for all parties," he said.
Prime Minister Prayut Chan-o-cha said the proposed real estate tax did not aim to squeeze revenue from the people, given its exemptions.
"We have to look around in all dimensions and now, there has not been a conclusion yet. I've talked to the finance permanent secretary and will discuss further whether there will be any exemption," he said.
Issara Boonyoung, adviser to the Business Housing Association, said the real estate tax will not hurt the property market because it will replace the existing land and household taxes and municipal tax.
However, the association has to wait and see the details of the tax - whether it will have an exemption for low-income earners.
"Normally, we will fix the real estate tax to be not over the normal payment for the current taxes, which include the household tax and municipal tax," he said.
After the grace period, the real estate tax will be gradually implemented. In the third year, taxpayers will pay only 50 per cent of the required tax from the act, and in the fourth year, only 75 per cent.
"Taxpayers will pay following the act's requirement in the fifth year after the act has been effective. I believed it's fair for all parties," he said.
Prime Minister Prayut Chan-o-cha said the proposed real estate tax did not aim to squeeze revenue from the people, given its exemptions.
"We have to look around in all dimensions and now, there has not been a conclusion yet. I've talked to the finance permanent secretary and will discuss further whether there will be any exemption," he said.
Issara Boonyoung, adviser to the Business Housing Association, said the real estate tax will not hurt the property market because it will replace the existing land and household taxes and municipal tax.
However, the association has to wait and see the details of the tax - whether it will have an exemption for low-income earners.
Author: Patrick Lusted