Local authorities can decide rate of land tax: Finance Ministry


Local authorities can use their discretion to determine whether or not landowners are growing plants on their lands just to avoid paying tax on vacant land, the Finance Ministry said on Wednesday.

Ministry permanent secretary Krisda Chinavicharana was responding to a query by the Bangkok Metropolitan Administration, which had inquired about the enforcement of the Land and Building Tax Act of 2019 regarding the fact that many landowners were going in for so-called “agriculture” to avoid paying increased tax on vacant land.

The act, which came into effect on January 1, 2020, states that owners of unused or abandoned land must pay tax of 0.3 per cent of the property’s value, while land used for agriculture is taxed starting at only 0.01 per cent to a maximum 0.15 per cent.

After the law went into effect, some landowners reportedly started growing easy-to-care-for crops such as bananas, lime and papaya, especially in prime locations in Bangkok along Ratchadaphisek, Rama IX and Ekamai roads.

Krisda said the Finance Ministry allows local authorities to use their discretion to determine the intention of landowners.

“If officials conclude that growing trees on one’s land is not in line with true agricultural purposes, they can proceed to enforce the tax rate for unused land,” he made clear.

Krisda also advised local authorities to refer to the Finance Ministry’s announcement on requirements for agricultural use of land, which stipulated 51 types of crops that can be grown on land and the minimum number per rai that will be considered as “growing for true agricultural purposes”.

For example, at least 200 banana plants must be grown per rai. For papayas it is 175 trees and for lime it must be 50 trees.