The Finance Ministry will tax commercial buildings by size, set a ceiling rate for homeowners and offer tax exemptions for some agricultural land to help taxpayers pay for the imminent land and buildings tax.
A ministry source said there will not be one fixed tax rate for all land and buildings but a range of rates and conditions so that the burden will not fall on one particular group of taxpayers.
This is not the first time the ministry has sought to calm the public outcry over the draft bill of the land and buildings tax by easing tax rates.
The ministry source said the latest adjustment sees the ministry imposing different tax rates for different sizes of commercial buildings. Tax rates for small buildings will be lower than big ones.
The ministry will cap the tax ceiling for owners of homes and land so that their tax burden will be fixed. However, in most cases taxes for residences should fall in a range of hundreds or thousands of baht per year, as the ministry will offer a 50% tax cut for the first 1 to 3 million baht of appraised value, said the source. The rest of the assessed value will be taxed at the normal rate.
For agricultural land, the ministry plans to offer two tax options. One is to exempt tax for 10 to 15 rai of land, which is often the amount of land owned by poor farmers. The second option is to set a particular value for a tax exemption.
"This land and buildings tax is not a new development as we have had the local development tax and house and land tax for years, though they are considered regressive and unfair," said the source.
The draft bill of the new land and buildings tax has been criticised as putting too much burden on general home and land owners. The ministry has attempted to quell jitters by halving the ceiling tax rates, providing a tax exemption period and allowing depreciation deductions.
The recently proposed maximum rates were 0.25% for land for agricultural use, 0.5% for residential use and 2% for commercial use. Unused or vacant land will be charged 0.5% tax, doubling every three years but not exceeding a maximum of 2% of the appraised value. The ministry previously set the ceiling rate for unused land at 4%.
The tax is expected to take effect in 2017 after the Treasury Department completes appraisals of 30 million land plots.