Thailand property

Apparently with the backing of Prime Minister of Thailand has embarked on what critics might call a foolhardy but noble endeavour: to introduce in the Thailand property market first property, land and inheritance tax legislation.
According to latest reports, the draft bill crafted by the Fiscal Policy Office has been completed and will soon be put before the cabinet for consideration.
In defending the legislation, Minister Korn reportedly said the government’s intention in introducing such a law was to create social justice and fairness. But he noted that the law – if it ever makes it through parliament – would not become effective this year or the next.
In essence, the law seeks to impose taxes on ownership of land and property whether it is for living, commercial, industrial or agricultural purposes. Ownership of unutilised land may face higher taxation than utilised land, as the law is intended to encourage owners to make use of the land in a productive manner rather than leave it idle.
The most important feature of the law is that the taxes will not go into the national coffers but to local governmental bodies such as municipal or tambon administration organisations, which will be tasked with tax assessment and collection.
In return, the taxes collected would be used for the development of the communities, for investment in public utilities and infrastructure which consequently would increase the value of the property and land already taxed.
There is no denying that such legislation has been long overdue in this country, where most of the land is owned by a very small number of landlords who include politicians, senior government officials, big business operators, influential figures and aristocrats, while the majority of the people are landless. Many rice farmers whose forefathers owned the land have sold their farmland to pay mounting debts and are today toiling on the same plots leased from their creditors.
The acute problem of landlessness among impoverished farmers has driven many of them to resort to encroachment of forest reserves in search of land to make a living, thus exacerbating environmental degradation. Worse still, the encroached land plots may be used for a few years of farming after which they end up in the hands of the landlords, with the farmers embarking on further encroachment for new farmland.
Minister Korn and his backers should be commended for their courage in attempting to introduce a law that is sure to face stiff resistance from the landlords, even within the government itself.
The minister certainly realises that several governments over the past several decades had tried to push for such a law and failed. Some of them backed off mid-way after confronting hostile resistance from powerful elements. It will be an uphill task for Mr Korn to solicit support for such legislation even among cabinet members, many of whom are known to be landlords themselves.
This anticipated resistance should not serve as a reason for backers of this controversial legislation to back off if they truly believe that the law is meant for the good of the people as a whole, the landlords included, and if the legislation has been drafted to bring about social justice and fairness.
At least Mr Korn and his supporters can rest assured that they have the moral support of the landless and of those who aspire to see this long overdue problem of social injustice finally and properly dealt with.