New tax looms for some realty  

Economy November 14, 2017 19:00

By   THE NATION

A NEW TAX must be levied to reflect the increased value of land and buildings alongside major transportation infrastructure development projects, said the Fiscal Policy Office (FPO) in order to recoup some of the high costs of government investment in the projects. 



Following a recent public hearing on a draft bill for tax on benefits derived from development of the government’s transportation infrastructure projects, the FPO said that land and condominium owners have not made any direct investment for infrastructure, and yet have indirectly gained from the higher asset prices that followed from the projects.

Land and condominiums worth more than Bt50 million will be taxed to reflect those indirect gains.

The FPO will forward to the National Legislative Assembly the opinions gathered from 44 days of public hearing about the draft bill. 

Feedback 

Public feedback varied from discussion about tax collection principles to suggestions for a 10-20 per cent range on local development taxes. 

In one response the Ministry of Finance (MOF) proposed special taxes be collected when a plot of land close to a transportation infrastructure project was sold. MOF said that a landowner would sell the land for a higher price and could pay the tax without any impact.

The FPO said the tax revenues would be applied to the country’s treasury balance. When the Ministry of Transport or other agencies were making future project plans, they would submit budget requests following normal legal processes.

The proposed draft bill waives the tax on land used for residential purposes and not sold during implementation of the project.

The FPO proposed that the Revenue Department would be responsible for tax collection. 

Tax would be related to increases in the value of land or buildings resulting from infrastructure development. 

Values, and taxes, could be assessed repeatedly if more than one transaction is made.

Only appraised asset prices would be used for tax calculations as sales prices are difficult to prove, the office said.