Wrong approach leads to wasted chance to cut inequality
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ONCE PRIME MINISTER Prayut Chan-o-cha had ordered a delay in the plan to collect land and building tax, many people clearly felt relieved. They were glad the government had heeded the views of the opposition and not slammed through the scheme.
Their feelings arose because the land and building tax bill, if enacted, would have affected the middle-class and the grassroots more than the landlords, who should have been the main target group for a new tax law.
Actually, the land tax collection should have had one main goal – to reduce the social gap – by forcing the wealthy, who have plenty of land, to sell their plots so that those who are not rich, would find it easier to buy land.
It was expected that if the wealthy, who own a lot of land, sold their plots, land prices would drop.
Surveys have found that the top 10 families, combined, have the largest amount of land – about 1 million rai. Of course, some plots have been put to good use while others have not. And many plots were definitely bought as speculation in land prices.
However, the Finance Ministry admitted that the principle of the bill was not aimed at reducing the social gap. Instead, it was planned to allow the government to earn more tax revenue.
As a result, the land tax proposal had been integrated into the same package as the housing tax.
This would expand the scope of people affected if the bill was enacted. Although the Finance Ministry proposed an increase in the minimal price of taxable housing units and land from Bt1 million to Bt1.5 million, many people would still be affected.
This is because the prices of ordinary houses now start from Bt1 million and housing units in Bangkok are worth over Bt2 million each. These house owners are not rich – they are working or salaried people who have to struggle to pay their house instalments, at least Bt10,000 each month.
So, the land and housing tax would add to their already heavy burden.
As a result, it was the right decision for the government to delay the tax collection.
However, many people are also sorry because normally a law to reduce the social and economic gap would be hard for an elected government to enact.
This is because those who fund political parties always own a lot of land. Likewise, politicians, who have the power to enact new laws when they are MPs, also hold a lot of land. As a result, it is unlikely the politicians would enact laws that would affect their associates.
As a result, many people have had high hopes for this government that has repeatedly said it was not made up of politicians. The government has also told society it wants to reform the country and reduce social gaps.
But now the hopes of many have been dashed because the Finance Ministry used the wrong approach, tying two contradicting issues together, causing its goals to go astray, leading to strong opposition.
Whether the ministry made such an error out of ignorance or intentionally, the land tax issue has became both fortunate and unfortunate following the latest orders from Prayut. Now, the poor will not be loaded with a new burden. At the same time, the government has lost a chance to reduce the social gap.
As a result, the government should review the issue by giving it a new and correct approach from a fresh start.
