Prime Minister Prayut Chan-o-cha yesterday slammed the brakes on the proposed land and building tax to help prevent an adverse impact on lower-income earners, the government spokesman said.
While chairing yesterday's meeting of the government's policy implementation committee, the prime minister ordered a delay in implementing the land and building tax, Government Spokesman Yongyuth Mayalarp told reporters at Government House.
He said the prime minister had instructed relevant state agencies to study further the long-term impacts of the proposed bill on the public, particularly on those from lower income groups.
Prayut pointed to the ongoing economic situation and concluded that the current time was not suitable for implementation of the proposal, according to the spokesman.
"The prime minister wants the law to be delayed. Implementation of the law must not affect the people in the future. It depends on the economic situation how long the proposed bill will be postponed," Yongyuth said.
He said that postponement of the tax had nothing to do with the criticism the proposal has provoked.
The spokesman said the delay in the tax would allow relevant agencies to study further the matter in order to determine a suitable measure in the future.
He said the Finance Ministry's permanent secretary had been assigned to lead the study that would focus on the tax structure in general and tax reform in a way that is suitable for the future.
No exact time frame has been set for completion of the study, according to the spokesman.
Yesterday's move surprised the stock market even though the latest draft of the tax bill had been relaxed and came with more exemptions and allowances.
Under the draft bill, land for agricultural purposes would be subject to a maximum 0.25-per-cent tax, residential property 0.5 per cent, and commercial property 2 per cent. Unused or vacant land would be charged at a progressive rate every three years, not exceeding 2 per cent of appraised value.
However, there would be a two-year grace period before the land and household tax replaced the municipal tax, which is currently in use.
Exemption from the new tax is likely to be sought from the Cabinet in the next two weeks for homes worth less than Bt2.5 billion (S$2.5 million), up from the earlier proposed Bt1.5 million.
Homes worth between Bt1.5 million and Bt5 million will be given a 50-per-cent allowance on the tax rate, translating into a tax of Bt2,500 a year. Also, home-owners aged 60 and above will be exempted from tax.