Chadchart urges review of land tax
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Chadchart urges review of land tax

Bangkok governor Chadchart Sittipunt
Bangkok governor Chadchart Sittipunt

Bangkok governor Chadchart Sittipunt is calling on the incoming government to review the new land and building tax rules as Bangkok's revenues have dropped significantly since the new rates were put in place earlier this year.

Prior to the implementation of the new rates, the Bangkok Metropolitan Administration set the land and building tax rate at 12.5% of the income generated by a plot of land. Under the new rules, however, the tax is calculated based on the value of the plot alone.

As a result, Mr Chadchart said, BMA's revenues have fallen significantly. For instance, BMA used to collect about 300 million baht from landowners in Phaya Thai district, but since the new rates took effect earlier this year, the amount has dropped to about 200 million baht.

"Similarly, the owner of a department store in Phaya Thai district now only pays 1.08 million baht -- down from 10.7 million baht. One owner of an office building in the district now pays three million baht in land tax, as opposed to 11.49 million baht, because the tax is calculated solely on land value, not rental earnings," he said, without naming names.

He went on to cite the example of another landowner, who used to pay around 4.35 million baht in land and building tax but was only charged 76,800 baht this year due to changes in the way the dues are calculated.

The governor also noted that tax collection in urban industrial areas has dropped as a result, while homeowners living in residential zones in the suburbs have to contend with a higher rate.

"People who own land plots with houses have had to pay more taxes, even though they earned nothing from their plot this year," said Mr Chadchart.

"It was hoped that the new structure would solve the social inequality, but it didn't."

Mr Chadchart urged the incoming government to initiate a review of the tax structure, saying it will help reduce inequality. He didn't say how much the BMA's revenues stand to be hit long-term if the changes stay in place.

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