The new land and building tax should have clear definitions for assets, be easy to use and convenient to pay, a legal expert suggests.
Kitipong Urapeepatanapong, chairman of legal firm Baker & McKenzie and adviser to the Thai Chamber of Commerce, said the new land and building tax is good, but the problem is communicating the code to taxpayers.
"This tax is not terrifying because the rate is very minimal compared with other assets such as cars," he said.
The failure is unclear definitions, such as homestay businesses being subjected to the commercial rate.
The new levy also sees hotels taxed for commercial use, while houses, condos and apartments for rent will be taxed under residential use.
"Should a homestay with only four rooms and booked mainly on weekends be taxed for commercial use, similar to a hotel?" asked Mr Kitipong.
Apartments rented on a monthly basis and condos or houses with a 30-year leasehold contract should be regarded as residential assets, not commercial assets, he said.
"Definitions should be clear," said Mr Kitipong. "Payment should be convenient. Landowners who have assets in Chiang Mai should be able to pay from anywhere, without travelling there."
Chumpol Suwannakijboriharn, secretary of the Fiscal Policy Office (FPO), said regulations in the new tax that have shortcomings will be amended by the FPO.
"Tax calculations for two assets located next door to each other is an example. One shophouse is rented for a noodle stall, the other is for a law firm. If they pay the same property tax rate, one will be viewed as too low or too high," said Mr Chumpol.
The new land and building tax act took effect last year and will start collection in August.
Atip Bijanonda, chairman of the committee on real estate development at the Thai Chamber of Commerce, said many people were confused about the new laws, including regarding readiness of the local administration organisation to collect the tax.
Suntithorn Yimlamai, deputy director-general of the Local Administration Department, said the department last year educated 20,000 local administration staff from over 7,000 local administration organisations nationwide on the new tax.
The department also published two guideline booklets and e-book versions.
With waivers and deductions given to landowners in the first few years, the department expects a loss of up to 1 billion baht per year, compared with earlier taxes, including the building and land tax and local maintenance tax.
Wilawan Veerakul, the Treasury Department's deputy director-general, said the land appraisal value on the website will be used until the end of this year.
"A new one will be used from Jan 1, 2021, which can be checked on the website from Dec 1, 2020, as the department is required to announce changes 30 days before they take effect," she said.
The Treasury Department also allows landowners to submit complaints about the new land appraisal value if they think it is unfair or incorrect.
According to the new tax structure, commercial land is charged 0.3% for property with an appraisal price of up to 50 million baht, 0.4% on land worth 50-200 million baht, 0.5% for land valued at more than 200 million baht to 1 billion baht, 0.6% for land worth 1-5 billion baht and 0.7% for land worth more than 5 billion baht.