State urged to go on with property tax

The government is being urged to press ahead with the planned land and buildings tax to make the best use of existing land and raise proceeds to boost the economy.

Somchai Ruchupan, chairman of the National Reform Council panel on economic, monetary and fiscal reforms, said yesterday at a seminar on economic development that the proposed land and buildings tax should go ahead, as it will not only be a tool to boost the economy but also reduce social disparities.

“Land is a significant factor for production, but in Thailand land is now mostly occupied just by certain groups of rich people and used for price speculation,” he said. “In fact, land should be used to support economic growth.”

Currently, according to Mr Somchai, a large number of land plots are left vacant and unused, contributing nothing to the economy.

He said if the land and buildings tax were enacted, it would at least encourage the owners to utilise the land.

“We believe if the government comes up with better land management, it will play a vital part in enhancing economic growth,” he said.

The draft bill on the new property tax is still pending the Finance Ministry’s consideration before seeking approval from the cabinet and the National Legislative Assembly.

Earlier Prime Minister Prayut Chan-ocha decided to shelve the bill, citing the economic slowdown and possible impact on low-income earners. However, the new property tax is a priority because tax revenue is desperately needed to finance multi-trillion-baht infrastructure investment as well as to aid the government’s goal of narrowing social disparities.

Mr Somchai also suggested the government reform fiscal policy to prevent state borrowing to fund populist schemes.

“Populist policies should be scrapped for good,” he said.

“Once they are introduced, the public generally demand more and they will be difficult to scrap. But if the government continues such populist polices, the entire nation will face financial collapse.”