The Fiscal Policy Office has hinted it will set the value of the waiver for a progressive land and building tax, in a move to make the tax more palatable to taxpayers.
The Finance Ministry is unlikely to charge the highest possible tax rate the first year, but it could rise the following year, said director-general Kritsada Jinavijarana. The tax rate will be set by the government, he said, not local administrations as the Democrat Party government's draft stipulated.
The Democrat's land and buildings draft set a maximum 0.5% tax on the appraised value of property used for commercial purposes, up to 0.1% on residences and up to 0.05% on land used for agricultural purposes. Unused land would be taxed 0.5% for the first three years before doubling every three years, but not exceeding 2%.
If a land and buildings tax bill is passed, the local maintenance tax will be scrapped, said Mr Kritsada. The local maintenance tax rate is based on the median price from appraisals between 1978 and 1981, but current market prices, particularly in Bangkok, have increased significantly. This low base is blamed for depressed local tax revenue.
Apart from the outdated appraisal prices, landlords who own five rai or less are exempt, and the local maintenance tax is regressive. The local maintenance tax rates are relatively low at 0.5% of the median price for land priced below 30,000 baht a rai, and 0.25% for that priced over 30,000 baht per rai.
The land and buildings tax is part of the tax reform proposed by the Finance Ministry to the military regime. The other proposals include an inheritance tax and a negative income tax.
The Fiscal Policy Office has hinted it will set the value of the waiver for a progressive land and building tax, in a move to make the tax more palatable to taxpayers.
The Finance Ministry is unlikely to charge the highest possible tax rate the first year, but it could rise the following year, said director-general Kritsada Jinavijarana. The tax rate will be set by the government, he said, not local administrations as the Democrat Party government's draft stipulated.
The Democrat's land and buildings draft set a maximum 0.5% tax on the appraised value of property used for commercial purposes, up to 0.1% on residences and up to 0.05% on land used for agricultural purposes. Unused land would be taxed 0.5% for the first three years before doubling every three years, but not exceeding 2%.
If a land and buildings tax bill is passed, the local maintenance tax will be scrapped, said Mr Kritsada. The local maintenance tax rate is based on the median price from appraisals between 1978 and 1981, but current market prices, particularly in Bangkok, have increased significantly. This low base is blamed for depressed local tax revenue.
Apart from the outdated appraisal prices, landlords who own five rai or less are exempt, and the local maintenance tax is regressive. The local maintenance tax rates are relatively low at 0.5% of the median price for land priced below 30,000 baht a rai, and 0.25% for that priced over 30,000 baht per rai.
The land and buildings tax is part of the tax reform proposed by the Finance Ministry to the military regime. The other proposals include an inheritance tax and a negative income tax.
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