The land and building tax law lets local administrative officials decide whether landowners are managing their lands in such a way to avoid paying a higher tax rate, says finance permanent secretary Krisada Chinavicharana.
He made the remark in response to a recent meeting between the subcommittee discussing the law and the Bangkok Metropolitan Administration (BMA), as the latter sought consultation from the subcommittee on how it should enforce the law in specific cases.
The BMA noticed that some plots in the heart of Bangkok were not being used and were subject to no tax or low tax under the previous law. Since the new law was introduced in 2019, owners of such plots planted trees so they would qualify as farmland, thereby entitling the owners to a lower tax for agricultural land.
Mr Krisada said the subcommittee has yet to submit its opinions on this matter to the committee tasked with handling legal aspects of the law. He said the law authorises local officials in charge of such tax collection to make their own judgement in specific cases.
However, if landowners plant trees on their land, regardless of the location, and such planting meets the official definition of agricultural land in the law, they should be taxed at the appropriate rate.
Earlier a Finance Ministry source who requested anonymity said the criteria for the land and building tax must be applied to all farmlands without discrimination. As to whether certain plots with high commercial value should be developed as farmland, the source said this is the decision of the landowners.
The law caps the tax rate for farmland at 0.15% of the land value. The tax ceiling for vacant land is 1.2%. The law stipulates that vacant land faces an increase of 0.3 percentage points in tax rate every three years if it is unused, up to a maximum of 3%.
The Land and Building Tax Committee has recommended tax rates and ceilings on all land types for local administrations. The administrations can impose tax rates that are lower or higher than the recommended rates, but must not exceed the ceilings.
