NLA to mull raft of taxes

The land and buildings tax, inheritance tax and excise tax base change will be the first three tax drafts to be put on the front burner for National Legislative Assembly (NLA) deliberation.

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The draft on the excise tax base, which will radically change the excise duty calculation structure, is expected to be proposed to the NLA next month, but it depends on whether the legislative body will table the reading, said Somkit Lertpaithoon, a member of the NLA and rector of Thammasat University.

He said the draft would be translated into English to facilitate foreign investors' understanding of the new system.

The draft law will allow the Excise Department to change its tax base across the board to state-recommended retail prices from ex-factory prices. The revision is aimed at plugging the current tax base structure's loophole after a number of manufacturers understated ex-factory prices in order to pay less duty.

Mr Somkit said should land and buildings tax take shape, it would replace the existing property tax and local maintenance tax.

The Finance Ministry recently hinted it would set the value of the waiver for a progressive land and building tax in a move to make it more palatable.

It has also ruled out charging the highest possible tax rate the first year, saying the rate would gradually climb.

For inheritance tax, the Revenue Department is set to impose a 10% levy on beneficiaries receiving asset transfers worth at least 50 million baht.

Excise Department director-general Somchai Poolsavadi said the planned change in the tax base to state-recommended retail prices from ex-factory prices for domestic products or cost, insurance and freight for imported items would prevent dishonest manufacturers from understating prices to pay less tax.

The change in calculation methods will not add to the tax burden of operators and cause consumers to pay more, as the tax rate of each product will be reduced when the new tax base comes into force under a concept of revenue neutrality, he said.

The new excise duty structure will foster transparency, fairness and standardised rates ahead of the AEC's start.

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