Chadchart calls for revision of land and building tax structure

Governor Chadchart Sittipunt said on Saturday that this issue was important as the Bangkok Metropolitan Administration (BMA) now collecting taxes based on the value of land rather than the flat 12.5% business tax.

“The new government should review the impact of the new rate and see if it really reduces inequality,” he said.

The government implemented a 15% reduction in land and building tax earlier this year. This tax cut was also applicable to plots that had received a 50% reduction under a previous decree. However, the 15% reduction was not applicable to those who received a 90% tax cut for a maximum of three years.

The 90% reduction was implemented in June 2020 to mitigate the impact of the pandemic.

The current tax is based on a step-up rate, which varies based on the value of land and construction.

Hence, under the new structure, Phya Thai district now generates around 200 million baht compared to some 300 million baht previously, he said.

Similarly, a shopping mall in the area now only pays 1 million baht, down from 10 million, while an office building pays 3 million baht based on land value rather than 11 million based on earnings from rent, he said.

Chadchart added that tax collection on the office building would drop further due to depreciation.

He said the new land and building tax applies to everybody, regardless of whether or not they can generate income from their land.

The governor added that he hopes the new government will change this tax structure as applying appropriate rates would help solve social inequality. He said individuals who generate higher income should pay higher taxes.

He also urged the government to cover the earnings lost from the tax cuts, so local agencies can spend funds in line with the Move Forward Party’s decentralisation principles.

The Move Forward Party is expected to put together a ruling coalition after it won 151 seats in the May 14 election.