The latest draft bill on the land and buildings tax indicates that it is likely to be imposed on property valued at more than 10 million baht, says senior official at Finance Ministry.
But the final figure has yet to be decided on by the bill drafting panel, said the official who declined to be named. The panel is concerned the high limit, which would affect fewer homeowners, would reduce the amount of revenue the government had hoped to raise from the new tax, said the source. On the other hand, it could encourage those opposing the tax to support it.
The Finance Ministry has said it is pinning its hopes on levying the land and buildings tax to raise the government's revenue ratio on assets from its low current rate of 1%, with taxes on consumption and income dominating the rest.
"If we start at an expensive price, it will ease public anxiety over the tax burden as they could see that only the rich ones will be taxed," said the source.
According to Finance Minister Apisak Tantivorawong, the ministry will proceed with the levy on land and buildings but the draft bill must be amended especially on the size and price of the land.
"We are trying to make the [draft] bill as clear as possible and also cut as much as possible having decisions made at the discretion of officials," Mr Apisak said. The proposed land and buildings tax would not add more to the burden of homeowners, particularly on low and middle-income earners, than what they currently pay, along with local development taxes, he said.
However, Mr Apisak added: "I don't want to talk too much about the draft and would rather wait until the cabinet approves the bill. There is still chance of changes in the details."
The Finance Ministry plans to propose drafts of both the land and building tax and a new personal income tax structure to the cabinet at the same time to ease public anxiety over new tax burden, said finance permanent secretary Somchai Sujjapongse. Having the draft bills approved simultaneously will show those concerned about the new land and buildings tax that they will be compensated by a lower personal income tax, he said, without saying when the bills will go before the cabinet.
Individual taxpayers will see increases in their annual expense allowance and other deductions, while the proposed land and buildings tax should satisfy all parties, as it will not represent an additional tax burden for people, said Mr Somchai.
The land and building tax is set to come into effect in 2017 once approved.