Govt postpones land tax

BANGKOK: Interior Minister Gen Anupong Paochinda has announced that the enforcement of the new land and building tax measures under the Land and Building Tax Act BE 2562 has been postponed from an initial starting date of January 1, 2020, saying that the responsible Local Administration Organisations will be asking land owners to submit details of their land holdings until March 2020.

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By The Phuket News

Tuesday 31 December 2019, 11:07AM

Interior Minister Gen Anupong Paochinda made the announcement yesterday.(Dec 30). Photo: NNT

The introduction of the Land and Building Tax law has caused confusion and concern among many parties, especially the taxation criteria, Gen Anupong said.

The Minister of the Interior has addressed the issue, stressing that the Ministry of the Interior and the Ministry of Finance are working together on this matter, he announced yesterday (Dec 30).

Gen Anupong said the Ministry of the Interior and the Ministry of Finance are now working together on taxation criteria, stressing that this law is intended to collect tax from the wealthy in order to help the poor, noted a report by state news agency NNT. (See story here.)

The Interior Minister said any persons receiving notification letters with inaccurate information after submitting their land plot details, can file for an amendment at the respective local administration; by submitting the request by mail or online, or authorizing other persons to file the request on their behalf.

The news move to delay the new land and building tax measures follows the government being urged to delay the implementation of the tax to give local authorities and taxpayers more time to prepare.

Future Forward party-list MP Sirikanya Tansakun, who also chairs the House committee on economic development, said local officials are not ready for the new property tax regime, reported the Bangkok Post. (See story here.)

She said even the Bangkok Metropolitan Administration, which is supposed to be ready for the new law, is not fully equipped to handle large numbers of property owners who wish to update their assets at district offices.

Ms Sirikanya said the government and opposition MPs discussed the issue and some agreed that the new land and building tax law should be put on hold by the means of an executive decree.

After the new year holiday, the Pheu Thai Party is likely to submit a motion to the House to discuss the proposal, she said.

It is reported that the new rules sent many land and property owners into a panic after they received letters from local administrative organisations and district offices informing them of their property type ahead of the enforcement of the new legislation.

She also criticised the government for failing to help local authorities prepare.

Under the 2020 budget bill which is being scrutinised in the House, local administrative bodies’ incomes are estimated at B115 billion with B30-40bn expected to come from the land and building tax.

“I think the enforcement of the law should be put on hold. But it may affect incomes of local organisations and their revenue may not meet the target. How will the government compensate them?” she said.

Fiscal Policy Office director Lawan Saengsanit insisted on Monday the new property tax regime will come into effect tomorrow as planned.

He admitted that some hiccups are likely because the law is new, but suggested some people might see their taxes go down.

Under the new law, tax is applied to four types of land – residences, farmland, commercial areas and undeveloped land – and rates vary depending on how the property is used.

It is also the first time that residential property is being taxed although a generous exemption threshold will apply.

On Monday, Interior Minister Gen Anupong said the first payment is being delayed as the Finance Ministry and the Interior Ministry look into certain issues which will be announced later.

He insisted the law is designed to improve tax collection efficiency and stressed that people whose property is valued below B50 million need not worry.

“Those who have low incomes and few assets won’t have to pay. Those who have money will have to, but there is a generous exemption.”

He said local bodies will be sending letters to people informing them of the new tax rates throughout March.

According to the new tax structure, land and buildings used for residential purposes with appraisal prices of up to B50mn are tax-exempt, those valued at B50-75mn are taxed at 0.03%, properties worth B75-100mn are taxed at 0.05%, and those appraised at more than B100mn at 0.1%.

If owners have more than one house, subsequent residences up to B50mn in value are subject to a 0.02% tax, and the same rate as principal homes is applied to residences worth more than that.