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Thai’s who are bequeathed fortunes from wealthy relatives could have to start paying inheritance tax under a new law that has been proposed by the Finance Ministry who have also floated two taxes on real estate and beverages.
Permanent secretary Rungson Sriworasat said that the ministry briefed the NCPO about the plan for inheritance tax last month. The junta has agreed with the initiative that will now be sent to the Council of State for legal review. When the NCPO finalizes the draft tax bill, the Finance Ministry will take it before the National Legislative Assemeby when it comes into existence this year.
Real estate and inheritance tax ideas are nothing new, the Finance Ministry has discussed the options with the governments over the last ten years. However, the governments historically could not pass the act due to the burden that would be placed on landowners and estate recipients.
It is thought that inheritance tax would be levied on all domestic assets passed down such as residences, land, cars, bonds and stocks, but would not be collected from any assets held overseas.
If the bill goes ahead Thailand will become the third country in Asia to adopt inheritance tax along with Singapore and the Philippines.
The real-estate tax plans will be assessed on land and improvements ranging from 0.05-2%. This means that land appraised at Bt10 million would incur a tax bill of Bt5,000 at the rate of 0.05 for the first year. As the idle land is held longer the liability would increase to Bt200,000 a year at a rate of 2%.
According to a report in the Nation it seems the owners of residences appraised at Bt1,000,001 would pay a real estate tax of Bt1,000.001 a year. For every Bt1 million in appraised value, the real-estate tax would amount to Bt1,000 a year.
Atip Bichanond, director of major residential developer Supalai, said this will impact owners of more undeveloped land, not property developers.
However, the Business Housing Association has proposed to the Revenue Department an exemption for residences appraised at not over Bt1 million or occupying not more than 50 square wah of land.
“I do not know if the new act has any exemption. If not, that will not be fair to lower-income families,” said Atip, who is also president of the association.
The new excise tax on beverages is proposed to be imposed according to sugar content, to expand the country’s tax base.Pla