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Finance Ministry Urges Strict Enforcement of Land Tax Law

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The Finance Ministry has called on local governments to rigorously assess underutilized land plots to ensure maximum tax compliance under the land and building tax law, said finance permanent secretary Lavaron Sangsnit on June 9, 2024. This law, in effect for five years, is currently under review for potential amendments to improve its enforcement and interpretation.

A key issue under discussion is the proper use of land plots. For instance, in Bangkok’s Silom district, known for its high property values, some landowners are reportedly using their plots to grow lime trees. “Local administrators claim limes can be grown in Silom. I disagree. This is not as it should be,” Lavaron stated. He suggested taxing such land at rates for unused land rather than agricultural rates, reflecting its prime location.

Bangkok and Pattaya, being the most developed areas, are likely to see any discretionary judgments first. The Finance Ministry has recently closed a public consultation on the land and building tax law, receiving feedback from over 500 individuals.

Current tax rates serve as reference points set by the government, which local administrations can increase but not decrease. Lavaron encouraged local authorities to consider raising these rates to fund essential infrastructure projects such as electricity, water supply, and roads. He emphasized that this flexible aspect of the law is forward-thinking and contemporary.

The ministry is also exploring criteria for green areas to qualify for tax exemptions. Lavaron noted that landowners could convert unused land into public gardens to benefit from such exemptions. Additionally, developing public parks or forest parks might also qualify, provided clear criteria are met. Another potential exemption could be granted if landowners permit local administrative organizations to use their land.

For fiscal 2024, the Finance Ministry estimates revenue from land and building taxes to be 40 billion baht, up by 3.7 billion baht from the previous year. This increase might mitigate the need to raise average tax rates.

Officials from the Finance Ministry and local government representatives have been involved in these discussions, highlighting the importance of balanced and fair tax enforcement across the country.

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