THURSDAY, March 28, 2024
nationthailand

A sigh for relief as property tax is put on hold

A sigh for relief as property tax is put on hold

PRIME MINISTER General Prayut Chan-o-cha yesterday "returned happiness" to the people in a surprise move by putting on hold a draft bill on land and building tax indefinitely due to the sluggish economy.

The move came after his administration had planned to consider a revised proposal by the Finance Ministry this month. One of them is |to lift the ceiling on tax exemption |on homes valued at Bt1.5 million |to Bt2.5 million in Bangkok and |its vicinity. 
But many people want to see taxes removed from homes all together and see real taxation of the rich, as the government always says that this sort of tax is aimed at narrowing the gap between the rich and the poor. 
The new land and buildings tax is one of the draft bills drawing the most criticism under the government. 
Some politicians are opposing the bill in a bid to gain popularity amongst the people.
 Although the latest draft bill on tax rates has given more exemptions and allowances as well as a low collection rate from land and buildings in the beginning – only Bt1,000 for every |Bt1 million – many people think it is unfair to home-owners because the proposed tax rate is hitched to the value of land. In other words, if the value of the land goes up, so would the tax rate.
Both Kittiratt Na-Ranong, a former finance minister in the Yingluck Shinawatra government, and Abhisit Vejjajiva, the head of Democrat Party and a former premier, oppose a tax being levied on homes. 
They argue that many people living in prime locations would inevitably be pushed to less expensive suburbs.
Inner-city living, therefore, would primarily be the domain of the rich. 
Sopon Pornchokchai, president of the Agency for Real Estate Affairs, has often opposed policies launched by the Prayut government.
But this time Sopon supports the land and building tax policy. He believes this kind of tax will be a facelift for the country’s land reform and make the use of land more efficient. 
Sopon said the land tax was similar to the car tax. 
But the difference, however, is that people choose not to own a car, but everyone needs a place to live in – whether owned or rented. 
A question that has to be asked is why didn’t the government implement a tax on neglected lands, |especially plots bought for speculation. 
But in the meantime, it should do more to prevent the rich from using loopholes in the law to pay less tax. 
As for land and residences, the government should apply soft tax rates – but on the same basis with not too many conditions – so people could afford it, feel like they belong to the community and realise it is their duty to pay taxes so their residential area can be developed.
Moreover, the government should collect taxes on an equality basis and the burden on the poor should not be too great. 
Also, if there has to be a home tax, the government needs to let the public know that all or most of the collected land tax will be used to develop infrastructure such as roads, electricity, tap water, garbage and waste management as well as improve security for communities. 
People are prone to try and pay the least amount of tax, so the more the exemptions, the greater the tax |collection-management cost, excluding the corruption factor that might occur if there are inefficiencies in the audit system. 
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