Thailand is first property tax law is unlikely to come into force by January as scheduled but will be delayed by another year to 2018, according to the finance minister.
The delay stemmed from differences of opinions involving categorisation between the Council of State, the government is legal adviser, and the Finance Ministry, Minister Apisak Tantivorawong said on Saturday.
Under the ministry is bill, properties are divided into four categories: farmland, residential land and houses, commercial land and buildings, and vacant land.
The Council of State views that vacant land should not be a separate category of its own. It argued if the ministry wanted to collect more tax on unused land, it should apply a surcharge on the first three categories.
However, the ministry stood its ground, Mr Apisak said.
"We maintain on having a separate category [for vacant land] because we want to send a clear message that unused land would be taxed at high rates to encourage the private sector to speed up developing it," he said.
In any case, he stressed both agencies stick the same principle -- to optimise the use of land.
The ministerial bill proposes the following ceilings for the tax rates: 0.2% for farmland, 0.5% for residential use, 2% for commercial purpose and 5% for vacant land.
The taxes will also be collected progressively by value. Farmland, as well as residential land and buildings, will get an exemption for the first 50 million baht of value. The portion above it will be charged progressively: 0.05% for 50-100 million baht and 0.10% for 100 million baht or more.
The bill is being vetted by the Council of State after being approved by the Cabinet on June 7. It will subsequently be deliberated in three readings by the National Legislative Council.
"[Despite the delay] I do not foresee any problems. After all, we have been waiting for this law for 20 years," Mr Apisak said.
The law is a combination of the existing building land tax law and the local tax law so local administrations can collect taxes more effectively and use the proceeds for local development. It also aims to promote the development and redistribution of land and to narrow the wealth gap.
Credit: Bangkok Post