Finally! Land Taxes!

Finally! We’ve been waiting on this for years, land lords in Thailand have enjoyed owning tremendous amounts of land for generations without any taxes spent on it whatsoever. While the annual tax %-age is low @ 0.5% to a max of 2% of land value when compared to what I see in Europe and the US, the thinking of landowners will change and I envision that the landscape of Thailand will look drastically different within the next 10 years because of this.

The draft bill, which was first proposed when the Democrat Party was in power, calls for penalty tax rates to be assessed on unused land to deter speculators. The rates would start at 0.5 per cent of the value of land and buildings in the first year and double every three years to a maximum rate of 2 per cent. That maximum may not be high enough to deter land speculation, Somchai said.

Source: The Nation

Now I’ve heard the argument that “oh land tax is unfair and those that don’t have money will be forced to sell their lands and that businesses will take advantage of this fact”

I’d like to argue the following instead, I think taxes on unused land is far more efficient than taxes on income tax because property wealth is far more concentrated than income when it comes to wealth-inequality in Thailand or any other country for that matter. With this tax, over time, I can see things being more fairer and if only this government would finally reduce personal income taxes then this country may become even more enterprising, the only downside? yes the entitled may be slightly less comfortable.

Oh and last point equity market related, yes this should be positive for property developers.

Stocks in the news (dcc, dna, grammy, ptg, sithai, tmb) 24.10.13

DCC

Releases 3Q13 and announces dividend — DCC 3Q13 net profit was reported at Bt295mn on revenue of Bt1.7bn. In the 9M13, net profit came to Bt1.1bn. It has announced a dividend of Bt0.72 per share. (Khao Hoon, 24/10/13)

Comment: It was and continues to be one of the easiest plays for upcountry growth in Thailand

DNA

All businesses growing — DNA expects this year’s revenue to be Bt2bn, supported by growth in all of its businesses. It is preparing to invest Bt50mn to set up one more cable TV channel. It will also buy a mobile app business worth not more than Bt30mn; it xpect the deal to be announced before year end. (Khao Hoon, 24/10/13)

GRAMMY

Undertaking roadshows — GRAMMY is preparing to hold roadshows in Singapore and Hong Kong. It is ready to bid for digital TV and is not concerned about network service cost. It has prepared Bt4bn for investment. (Khao Hoon, 24/10/13) Continue reading Stocks in the news (dcc, dna, grammy, ptg, sithai, tmb) 24.10.13