Bangkok governor urges land tax review as city revenues plummet

Buildings in Bangkok, Image via Flickr

Bangkok Governor Chadchart Sittipunt has urged the incoming government to reevaluate the recently implemented land and building tax rules, as the city’s revenues have seen a significant decline since the new rates were introduced earlier this year.

Previously, the Bangkok Metropolitan Administration (BMA) set the land and building tax rate at 12.5% of the income generated by a plot of land. However, under the new rules, the tax is determined based on the plot’s value alone.

Chadchart explained that the BMA’s revenues have decreased considerably as a result. For example, the BMA used to collect around 300 million baht from landowners in the Phaya Thai district, but since the new rates were introduced, the amount has dropped to approximately 200 million baht. He said…

“Similarly, the owner of a department store in Phaya Thai district now only pays 1.08 million baht — down from 10.7 million baht. One owner of an office building in the district now pays three million baht in land tax, as opposed to 11.49 million baht, because the tax is calculated solely on land value, not rental earnings.”

Chadchart also cited the case of another landowner who previously paid around 4.35 million baht in land and building tax but was only charged 76,800 baht this year due to the changes in the calculation method.

The 57 year old governor highlighted that tax collection in urban industrial areas has also decreased, while homeowners in residential zones in the suburbs are now faced with higher rates.

“People who own land plots with houses have had to pay more taxes, even though they earned nothing from their plot this year.

“It was hoped that the new structure would solve the social inequality, but it didn’t.”

Chadchart called on the incoming government to review the tax structure, stating it will help reduce inequality. However, he did not specify the potential long-term impact on BMA’s revenues if the changes remain in place, reported Bangkok Post.

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