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Finance Ministry Forecasts Surge in Land Tax Revenue

The Finance Ministry anticipates a notable surge in the collection of land and building tax this year, projecting a total of 43 billion baht, marking an 8 billion baht increase from the previous year. This rise comes as the discontinuation of tax discounts comes into effect.

Addressing participants at a property seminar organized by the Daily News on the fifth anniversary of the tax’s implementation and discussing the real estate sector’s outlook, finance permanent secretary Lavaron Sangsnit outlined the ministry’s ongoing review of the tax law to ascertain the necessity of amendments, with a decision expected by the year’s end.

The evolution of the tax law was elucidated by Mr. Lavaron, highlighting its extensive deliberation over more than two decades before being enacted in 2019, with the inaugural levy collection initiated in 2020. However, governmental measures amid the pandemic substantially reduced the tax burden by 90% until 2021, with the full-rate imposition commencing in 2022. Last year saw a 15% reduction in tax burden to mitigate economic challenges.

This year, sans tax reduction measures, revenue is foreseen to ascend to 43 billion baht from last year’s 35 billion, according to Mr. Lavaron. The prospect of future revenue from this tax appears promising, with minimal likelihood of decline, as it is contingent upon the escalating value of land and buildings.

Regarding taxpayers, Mr. Lavaron indicated a substantial increase from 7 million in the inaugural year to 16 million in 2022. He emphasized the importance for local administrative organizations to conduct land usage surveys, given the disparate tax rates based on land usage types. Bangkok, he noted, has accomplished 99.4% of its land usage assessment.

Mr. Lavaron also acknowledged the government’s endeavors to invigorate the real estate sector, which have contributed to a degree of clearing the housing stock and a 1.5% economic growth in the first quarter of the current year. He expressed optimism for enhanced growth in the ensuing quarters, propelled by anticipated government budget disbursements and planned stimuli.

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