Private sector's views needed on proposed land, construction tax

He told the “Real Estate Megatrends” seminar, organised by the Government Housing Bank’s Real Estate Information Centre, that the ministry had to delay submitting its proposals for the sector as it needed to do additional work on the details, as well on related taxes such as special business tax, and transfer and mortgage fees.
The ministry also has to hear the views of the private sector, which will be affected by a land and construction tax, he said.
“We are hearing what the problems are and considering how best to draw up the legislation, so that there are fewer questions when the law is implemented,” he added.
Wisut said he was confident, however, that after the overall reform package was implemented the resulting tax-income growth would facilitate better support for investment demand.
The government’s planned tax reform covers revenue tax, customs tax and excise duty.
Although in the first month of the current fiscal year, October, tax collection was 4 per cent lower than in the same period last year, it was still 5.1 per cent higher than the target at Bt171.49 billion, the deputy finance minister said.
“Value-added tax came in higher than the estimate. This is a good sign that domestic consumption is returning, and as a result we have confidence that we will collect tax above the estimated level during this fiscal year,” he said. Issara Boonyoung, director of the Business Housing Association, said the association supported the introduction of a land and construction law because it would be fair to all related parties.
However, it has proposed that the Finance Ministry go into more detail in regard to certain aspects of the new law, especially concerning commercial construction, which is a much more segmented market than the residential sector, he said.
For example, there is the question of whether the building of schools, hotels, offices, entertainment complexes and hospitals should be subject to different tax rates, because they generate different levels of income, he explained.
Meanwhile, there is also the issue of whether other property-related taxes need to be adjusted if a land and construction tax is to be introduced, he added.
“We are willing to discuss these matters with the Finance Ministry, but we also have to see the draft of the tax law, especially the details of the types of commercial building, and the tax rates. Then we can compare it with the existing law related to property business at this time,” said the association chief.