The Finance Ministry will not consider this year extending the period of the land and building tax reduction because of the fiscal burden, says Finance Minister Arkhom Termpittayapaisith.
The 90% tax cut took effect in June 2020. From 2020 to 2021, the tax reduction cost the state coffers around 30 billion baht per year, he said.
The ministry believes this tax cut should not be extended, said Mr Arkhom.
He said the tax is collected by local administrative organisations for their local development. Revenue loss from the tax cut has forced the ministry to seek income from elsewhere to offset the dip, said Mr Arkhom.
The government has launched a host of measures to relieve people’s economic burden caused by the pandemic, which started in late March 2020.
Under the law, first-home owners are exempt from property tax for the value of land and buildings up to 50 million baht, or 10 million baht if they only own the structures but not the land.
For ownership of houses other than the primary one, the rate is a step-up basis starting from 0.02%, varying depending on the land and house value.
The normal tax rate for farm land is 0.01-0.1%, while it is 0.02-0.1% for residential land.
The rate for land and buildings owned by individuals is 0.03-0.1%, while the rate for vacant land is 0.3-0.7%.
The government is inching towards imposing taxes on some products and ending tax waivers to ensure fiscal stability and expand the tax base.
Mr Arkhom said last week taxing profits from cryptocurrency trade and a plan to end the financial transaction tax waiver on share sales on the local bourse should help to expand the tax base and garner additional revenue for national development.
He said Thailand has not expanded the tax base for many years. Though GDP has expanded over the years, tax revenue has not increased in relation to GDP.
This is because the country offers a host of tax exemptions to support specific sectors, said Mr Arkhom.
The Finance Ministry forecast economic expansion this year of 4%.
The government set expenses for fiscal 2022 at 3.10 trillion baht and anticipates net revenue of 2.4 trillion baht. The government is expected to borrow 700 billion baht to offset the budget deficit.
Source: Bangkok Post