Land and Building Tax for Enhancing the Local Fiscal Decentralization in Thailand

Abstract

The objective of this academic article is to study the implementation of Land and Building Tax and their implications on local fiscal decentralization, reflecting on challenges, and proposing recommendations. Given the importance of local fiscal decentralization to enable local administration organizations to have sufficient revenue for their own public service provision and to reduce reliance on central government, the Land and Building Tax Act was enacted in 2019. This act serves as a tool for local administration organizations to collect revenue from property assets at rates suitable to economic conditions, thereby generating income for local administration organizations and enhancing local fiscal efficiency. The study found that revenue collection by local administration organizations following the enforcement of the law has not significantly increased. This is due to delay and reduction in tax collection rate, coupled with inadequate enforcement readiness.      As a result, revenue from property tax has not met legal expectations. Recommendations for improving the efficiency of the Land and Building Tax Law collection in both the short and long term are provided across legal, managerial, and policy dimensions.              These recommendations aim to support local administration organizations in achieving greater fiscal autonomy and fully developing their respective locals in the future.