Official urges courage in tax assessment
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Official urges courage in tax assessment

Green areas may receive exemption

An aerial view of buildings in Bangkok. A review of the property tax is in progress. (Photo: Wichan Charoenkiatpakul)
An aerial view of buildings in Bangkok. A review of the property tax is in progress. (Photo: Wichan Charoenkiatpakul)

Local governments must be courageous in assessing which land plots are being underutilised or not used as they should be, as this assessment determines the maximum tax burden according to the land and building tax, says finance permanent secretary Lavaron Sangsnit.

Mr Lavaron said the land and building tax law, which has been in effect for five years, is under review to determine any necessary amendments.

One issue generating much discussion relates to enforcement and interpretation of whether certain plots are being utilised as they should be.

An example involves the planting of lime trees in Silom district, an area considered to have the most expensive land in the country.

"Local administrators claim limes can be grown in Silom. I disagree. This is not as it should be," he said.

"In this instance, I think it's reasonable to impose taxes at the rate applicable to unused land rather than the agricultural land tax rate."

If any discretionary judgements are made, Mr Lavaron said they would likely occur in Bangkok and Pattaya first as they are the most developed areas.

He said the Finance Ministry solicited public opinions regarding the application of the land and building tax, closing the feedback collection period earlier this month after more than 500 individuals offered their opinions.

The land and building tax rates currently applied are reference rates set by the government for local administrations to collect. The rates are considered to be minimum rates.

Local administrations have the authority to increase tax rates above the reference rates set by the government, but they cannot set rates lower than the reference rates.

Mr Lavaron said if any local administrative organisations have the courage to raise rates to fund local development projects related to electricity, water supply or roads, they are permitted to do so.

This aspect of the law is considered contemporary, he said.

The ministry is also considering criteria for green areas to qualify for land and building tax exemptions. If landowners do not wish to leave their land unused, they may convert it into public gardens allowing public access to qualify for tax exemptions under the law, said Mr Lavaron.

Another possible tax exemption is for landowners to improve an area to become a public park, he said.

Development into a forest park may also be considered for an exemption, provided clear criteria are established, said Mr Lavaron.

One final option to avoid land and building taxes involves landowners allowing local administrative organisations to utilise their land for an exemption, he said.

Mr Lavaron said the estimated revenue from land and building taxes for fiscal 2024 is 40 billion baht, an increase of 3.7 billion from the amount collected the previous fiscal year, which might negate the need to raise average tax rates.

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