Draft windfall tax on EEC agenda
Agency to discuss details of levy with Finance Ministry soon
The Eastern Economic Corridor (EEC) Office plans to talk with the Finance Ministry soon about a draft bill on taxing windfall gains to collect capital gains tax from companies, property owners and speculators that are expected to gain from inflated prices for plots as new infrastructure is developed in the three EEC provinces.
Five megaprojects are planned for the corridor, consisting of a high-speed railway linking three airports (225 billion baht); U-tapao aviation city (290 billion); a maintenance, repair and overhaul centre (10.6 billion); the third phase of Laem Chabang seaport (114 billion); and the third phase of Map Ta Phut seaport (55.4 billion).
Kanit Sangsubhan, secretary-general of the EEC Office, said the discussion with the Finance Ministry would be about details such as ceiling and applicable rates, the surrounding radius between properties and infrastructure locations.
"We plan to discuss a tax draft, precluding exemptions for plots located in the special economic zone," Mr Kanit said.
In July 2018, the cabinet approved a draft bill on the land windfall tax, a levy on inflated property prices driven by transport infrastructure projects.
The new tax will charge both individual and corporate owners for commercial purposes and condominium projects worth more than 50 million baht every time ownership is transferred, from the time when the transport infrastructure project starts construction until the project's completion.
A draft bill on the land windfall tax caps the ceiling at 5% of the inflated price, but the applicable rate will be decided later.
Those liable for the tax must own land within a radius of five kilometres of a station serving high-speed, double-track or electric trains, or of the on- or off-ramp of an expressway. Those who own plots within 5km of building-restricted zones such as airports or ports will also be required to pay the tax.
The new tax will be charged only once the owners sell their land after the state projects nearby begin construction.
The draft is being reviewed by the National Legislative Assembly and is expected to be published in the Royal Gazette once a new government takes charge.
Mr Kanit said the office will talk with local villagers and administrative offices in the EEC provinces to allocate tax collection under the windfall gains tax draft as part of the local development budget in the future.
He said the progress of the five megaprojects has been delayed for three months, but the office insists it will sign all contracts by June.
"The negotiation process with bidders has taken longer," Mr Kanit said. "Moreover, two of the five projects are pending rulings by the Administrative Court over disputes between bidders and the EEC Office."
Separately, Mr Kanit said the office plans to speed up the development plan for the smart city and aerotropolis projects in the EEC in the second half.
He said Amata Corporation Plc aims to develop the smart city project in Rayong as the first location in the EEC.
"After the EEC was initiated in mid-2016, the government drafted all related acts and laws and planned for the development of much infrastructure to facilitate all investors," Mr Kanit said. "We are now completing all basic development, then will promote the 12 targeted industries."