Ministry to mull delay of land and building tax collection

0

The Finance Ministry is considering the private sector’s proposal to delay and reduce collection of the land and building tax because businesses are struggling with the double whammy of the impact of the pandemic and the Russia-Ukraine war, says minister Arkhom Termpittayapaisith.

In 2020, the government issued a 90% cut to the land and building tax to ease the burden on owners of land and building sites because of the severe impact of the pandemic.

This tax cut was in effect from 2020-21, but the ministry declined to extend it past last year.

- Video Advertisement -

Mr Arkhom said he assigned the Fiscal Policy Office to conduct an analysis of the tax collection after the private sector proposed the tax be delayed and reduced.

Landowners usually have to pay this tax in April. Some city administrations such as Bangkok postponed the tax collection from April to July to ease the hardships of the people.

A ministry source who requested anonymity said the ministry is concerned a delay or cut of this tax could affect the local administrations’ revenue.

The reduction of this tax by 90% during 2020-21 cost local administrations more than 30 billion per year in total and the government cannot seek new revenue to offset the losses.

Though this year landowners have to resume paying the full amount, the land and building tax law still offers a payment discount this year.

The law took effect in 2020 and offers a tax payment discount for the first three years of enforcement. This year is the last year the law offers the discount.

Regarding the tax discount rules, if landowners are assessed a tax higher than the amount calculated under the previous land tax, they are allowed to pay the previous tax rate.

Any excess amount above the previous tax rate is charged 25% of the excess in 2020, 50% of the excess in 2021 and 75% of the excess in 2022.

For example, in 2020 if taxpayers had to pay 120 baht under the new law but only 100 baht in tax under the old tax system, this means they would pay a total of 105 baht.

This calculation is based on a 100-baht levy under the old tax system, plus 25% of the excess 20 baht, which is 5 baht.

Source: Bangkok Post

LEAVE A REPLY

Please enter your comment!
Please enter your name here