Thailand’s Fiscal Policy Office Director has suggested that the country needs to revamp its entire tax structure, including upward adjustments to property and building taxes in the Kingdom.
Somchai Satchaphong told reporters on Tuesday that the move is needed to accommodate the country’s increased expenditures and to balance reductions on income taxes.
He suggested that any increase in tax revenues would come from consumption taxes, such as the value added tax (VAT) and excise tax. The current VAT rate in Thailand is 7 percent while its ceiling is 10 percent. According to Somchai every 1 percent increase in VAT will generate an additional THB50 billion in tax revenues, however any increase must be made during a period of good economic expansion which is expected to come in three or four years.
Somchai explained that with Thailand’s aging society generates less income tax, so the government needs to find revenue from other areas. With the consumption tax hikes, the country’s fiscal budget would be balanced by 2017.
He also touched on possible adjustments to property and building taxes. He noted the country’s current 0.5 percent tax on unutilised land is low compared to other countries’, and Thai people have been speculating on real estate on a large scale.
He noted, however, that any adjustments will have to be made after carefully studying any possible adverse effects on Thailand’s real estate sector.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote
this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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