THE NATIONAL Legislative Assembly (NLA) is reviewing a bill for the long-awaited land and buildings tax with a subcommittee formed to study possible burdensome impacts, while the Excise Department plans to exempt |wine priced below Bt1,000 per bottle as a means to protect local vineyards.
“A sample of the targeted taxpayers will be gathered from Bangkok and other provinces and a comparison will be made with their previous tax payments,” said Wisudhi Srisuphan, deputy finance minister, who chairs the committee vetting the bill.
The subcommittee would assess not only the targeted taxpayers’ new burden but also their tax payment ability at the new effective rates.
The bill’s review was targeted to be completed this month, but the timeframe could be extended, given the number of people involved, he said. The act is set to go into force on January 1, 2019.
Most of the committee’s members want to cut the threshold for first-time homes and land to below Bt50 million as an effort to widen the national taxpayer base, but this issue is under consideration.
The bill sets ceiling rates of 0.2 per cent of appraised value for agricultural land, 0.5 per cent for residences, 2 per cent for commercial property and 5 per cent for vacant or idle land.
The tax will be levied on first homes and land used for agricultural purposes with appraised value of Bt50 million and up, with the rate applied to the amount exceeding Bt50 million.
The tax will also be applied to second homes on a progressive basis of 0.03-0.30 per cent.
On the other taxation front, wine priced at up to Bt1,000 per bottle will be exempt from tax under the new excise tax scheme, said Somchai Poolsavasdi, director-general of the Excise Department.
The tax-free ceiling had been Bt600.
He cited protection for locally made wine for the increase in the value. The country has six to seven local wineries.
The tax rates will be based on alcohol content, rather than price, and similarly, on sweetness, he said.
The new tax rates for alcohol drinks, covering beer, liquor and wine, will be proposed next week or the week after next, and will be enforced on September 16.
The new excise tax rates for other products are waiting publication in the Royal Gazette.
Somchai calmed operators.
“The new practices may find some problems. However, we are ready to help solve problems. Earlier, the department trained operators at all levels to cope |with tax collection under the new bill.”
Thanakorn Kuptajit, president of the Thai Alcohol Beverage Business Association, said his industry has to adjust to the new excise tax scheme, which is based on alcohol content and could lead to a reduction in the consumption of booze.
Prachuab Tayakeepisut, vice president of the Thai Beverage Industry Association, said taxes for products that affect chronic-but-not-contagious diseases should not be only aimed at sweet beverages, as there are other types of products that affect consumers’ health, he said.
Ongarj Pongkijvorasin, chairman of the Federation of Thai Industries’ Automotive Industry Club, conceded that the law aims to raise the efficiency of the taxation system and promote fair and equal business conduct, while taxing retail prices does not increase operators’ tax burden.
However, some carmakers may need to adjust through cost-cutting, given the onerous taxes pushed on some models, he said.