The Finance Ministry is contemplating a reduction in the maximum rates of the land and buildings tax in a bid to soothe people's nerves.
A gap between the ceiling and the effective tax rates should be narrowed to three to four times from eight to 10 times, Finance Minister Sommai Phasee said yesterday.
The bill on the land and buildings tax, expected to go for cabinet approval this week, has set maximum rates at 0.5% for land for agricultural use, 1% for residential use and 4% for commercial use.
Unused or vacant land will be charged at a progressive rate every three years but not exceeding a maximum level of 4% of the appraised value. The ministry will later issue an organic law stipulating the effective tax rates.
Mr Sommai said the ministry was reviewing whether a 2-million-baht exemption for the new tax was appropriate, as those who resided in provinces where land prices were low might not be liable for the tax.
The tax is expected to be enforced in 2017 after the Treasury Department has completed appraisals of 30 million land plots. It has completed assessments on only 7-8 million plots.
The bill will replace the local development tax and house and land tax, which have been criticised as regressive since they are based on outdated appraisal prices and have many waivers.
The new tax is expected to generate higher revenue for local administrative organisations than the previous taxes and then lower the government's burden in subsidising them.
Mr Sommai said a 40-billion-baht borrowing plan to fund road maintenance and repairs nationwide would go before the cabinet for approval next week.
Of the total budget set aside for road construction and maintenance, 15 billion baht will be spent by the Rural Roads Department and 25 billion by the Highways Department.
The budget is part of the government's economic pump-priming scheme and aimed at creating jobs in rural areas during this dry season.