Land tax bill languishes in NLA scrutiny
Latest committee extension leaves implementation up in the air
The draft land and buildings tax has not progressed after the National Legislative Assembly (NLA) standing committee extended the scrutiny process for the eighth time, lapsing at the end of September.
Whether the law can be enforced on Jan 1, 2019 as scheduled will depend on the readiness of state agencies to collect the new property tax, said Deputy Finance Minister Wisudhi Srisuphan.
The bill requires land and buildings tax to be paid in April.
Mr Wisudhi said local administrative organisation officials, who will be responsible for collecting the land and buildings tax, cannot survey private sector land and buildings at the moment because the tax has not come into force yet.
The draft bill on the land and buildings tax has been stuck in the scrutiny process of the NLA's standing committee after passing a first reading in March 2017.
The NLA committee earlier watered down the new property tax rates proposed by the Finance Ministry. It agreed to call for a ceiling tax rate for homes of 0.3%, down from 0.5% proposed by the Finance Ministry; an agricultural use rate of 0.15%, down from 0.2%; and other used and undeveloped land at 1.2%, down from 2%.
Second homes will be taxed at 0.02% for property with appraisal values of up to 50 million baht, 0.03% for 50-75 million, 0.05% for 75-100 million and 0.1% for more than 100 million.
Moreover, the committee recently agreed to reinstate the Finance Ministry's proposal for the first-home exemption threshold of 50 million baht, from 20 million previously. If the latest proposal goes into effect, owners of first homes appraised at 50-75 million baht will be required to pay a property tax rate of 0.03%, or 300 baht for every million baht that exceeds the exemption threshold, 0.05% for homes appraised at 75-100 million, and 0.1% for houses appraised at more than 100 million.
Mr Wisudhi has cited Prime Minister Prayut Chan-o-cha as saying he wanted lawmakers to pass a draft bill on the land and buildings tax under his regime and that the law's enforcement would remain on schedule.
His remarks came after local media reports that the draft bill's implementation would be put off to 2020.
The law has been a priority for the government because it can increase tax revenue for local administrations and narrow economic disparity. The new property tax will replace the house and land tax and the local development tax, both of which have been criticised for being regressive.