The newly appointed Prime Minister Abhisit Vejjajiva by the House of Representatives has pledged to introduce property and inheritance taxes

Finance Minister Korn Chatikavanij said the government wants to review a land and building tax bill before the Fiscal Policy Office (FPO), first proposed over a decade ago to upgrade the country’s tax system, yet discarded by the Thaksin government.

Every time these taxes are proposed they are met by strong opposition from the public and politicians. There seem to be few other ways to help the poor although there must be options available which have not been enacted.

Mr. Abhisit said the proposed property tax would combine land and building law and local development tax law generating revenue for districts and local government.

Under current law, no tax is applied on earnings from non-leasehold land and property, while land and buildings which are offered for lease are taxed at 12.5% of revenues earned.

Mr. Abhisit said the government would consider how to make tax collection fair to landholders. He added that tax waivers should be considered for low income earners in need of accommodation, while progressive rates should be leveled against people who amass land plots but fail to put them to use. The few foreigners over the years who have been charged with trading in land, one of the listed prohibited activities by foreigners, were dividing larger plots of land they purchased in Thai company names and selling them.

Mr. Abhisit said, “The property tax would address unfair distribution of land, and it was the government’s job to explain why it was a “must do” policy.”