The land and buildings tax will not be a land tax alone, he said on Monday (March 23).
Mr Sommai’s comments came after Prime Minister Gen Prayut Chan-Ocha last week instructed the Finance Ministry to study the possibility of imposing tax only on land, in order to alleviate the tax burden on homeowners.
Gen Prayut earlier decided to shelve the ministry’s bill on land and buildings tax for further study, citing an economic slowdown and the possible effect on low-income earners.
The tax is among the government’s priorities, seeking to narrow economic disparity, boost the government’s revenue stream and improve land use.
Mr Sommai said a home with an appraised value of B4 million would be subject to a mere B1,500 in land and buildings tax per year, less than pay-TV fees.
Based on the ministry’s recent proposals, homeowners would be charged 0.1pc of appraised value. Land for agricultural and commercial use would be taxed at 0.05pc and 0.2pc, respectively.
Houses with an appraised value of up to B2 million would receive a 75pc tax allowance, translating into a B250 tax payment for every 1 million.
Residences with an appraised value of B2-4 million would receive a 50pc tax allowance, with homeowners liable to pay B500 for every B1 million on amounts exceeding B2 million but no more than B4 million.
For houses with an appraised value of more than B4 million, owners will be liable to pay tax at the full rate of B1,000 for every B1 million of appraised value beyond B4 million.
For land for agricultural use, land with appraised value of less than B1.5 million would be exempt from tax, so farmers with 20-30 rai of land in remote areas would pay nothing at all.
Mr Sommai said landlords of vacant land would be penalised by seeing the tax rate increase every three years.
Separately, he said government revenue could fall slightly short of the B2.325-trillion target for this fiscal year, so the government would encourage state enterprises to contribute higher income to offset the lower-than-expected revenue.
Meanwhile, Prime Minister Gen Prayut Chan-Ocha asserted on Monday (March 23) that a revamp of the tax structure is necessary, while the government will only raise the VAT rate when the time is right.
Gen Prayut said the revamp of taxation was necessary as it would provide future governments with additional tools for reducing disparity and fostering fairness.
He gave as an example value added tax (VAT), which “allows” every member of the public to contribute to national development. He added that the VAT rate would be raised only under “appropriate circumstances”.
According to Gen Prayut, the lower-than-expected amount of revenue collected by the state has to do partly with the decline in exports.
Exports, which contribute as much as 70pc to the country’s GDP, have contracted in line with the slowing of the global economy, he said, noting also that Thailand’s manufacturing costs are higher than those of her competitors.
NNT