Bangkok Metropolitan Administration to levy land taxes in full
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Bangkok Metropolitan Administration to levy land taxes in full

Owners are turning to farms to pay less

The Bangkok Metropolitan Administration (BMA) is planning to fully collect land and building taxes on land used for agricultural purposes after landlords and property owners allegedly exploited tax cuts to avoid higher taxes, a source said.

Under current regulations, land plots used for agricultural purposes are subject to a land tax of 0.01-0.1%, depending on their value.

The full rate is 0.15%, which has a tax liability of 1,500 baht per 1 million baht.

However, the full rate is being planned on land used for agricultural purposes in three zones -- commercial (red), industrial (purple) and warehouse (lilac) -- under the city planning law, the source said.

The tax rates for the other zones will remain unchanged.

The plan comes after owners of undeveloped land in commercial areas, where land prices are high, turned their properties into banana and lime plantations to lower their tax rates.

Undeveloped lands in commercial areas are subject to 0.3-0.7% tax of their value.

According to the source, more than 120,000 undeveloped land plots have lately been used for agricultural purposes.

The BMA's fiscal office has already drafted new tax regulations, which will be submitted to the Bangkok city council for approval.

The BMA has sent a letter to the Finance Ministry's Fiscal Policy Office to ask about its plan to make the full collection on lands used for agricultural purposes.

The source said the plan is in line with Bangkok governor Chadchart Sittipunt's policy on land development, in which land should be developed in accordance with city zoning.

"So, we are considering adjusting the land and building tax rates to encourage land owners to make proper use of their property," the source said.

"We start with agricultural land and if we can proceed, the BMA will collect more revenue."

However, the source said with less than two months before the start of the new fiscal year, the new rates may not be imposed until the 2023 fiscal year, which begins in October.

On the use of privately owned unused lands for development into public parks, a committee has been set up to draw up criteria to ensure optimal benefits for the public.

It is part of the governor's campaign platform "Bangkok 15 minutes", in which city residents will have parks that are no more than 15 minutes' walk away from their houses.

The BMA needs to work out details of such arrangements such as the period of land use because the property owners will receive tax benefits or they may lose income opportunities.

"The criteria are expected to be completed in August so it can be implemented in the next fiscal year.

"Initially, we must first consider which areas will be turned into parks, how large they should be and how much money is needed.

"The BMA has to shoulder maintenance costs and it may not need the entire plot offered.

"For example, if it receives an offer of 10 rai, it may want just 2 rai for its park project and collect land tax for the remaining 8 rai," said the source.

The Bangkok administration has received more than 10 offers and the plots are scattered in several districts including Watthana, Pathumwan, Bang Rak, Taling Chan and Thawee Watthana. Staff are looking at which ones will be suitable.

After assuming office, Mr Chadchart floated the idea of collecting a higher tax on land that is improperly developed and discussed the idea with Interior Minister Anupong Paojinda.

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