How to reduce taxes in Thailand with bananas

An original way to reduce the land tax was found by Thai developers, turning the empty lots into banana plantations in the city

How to reduce taxes in Thailand with bananas

In Thailand, one of the main topics among users of social networks was the publication of a well-known Thai real estate developer, designed to demonstrate the increased level of “green image” of the company. Most readers, however, saw a different message in the post and revealed the real intention of the developer, who, in their opinion, is trying to avoid paying land tax.

This week, Impact Exhibition Management, a Bangkok-based company, released a statement that received widespread coverage on social media. The developer reported that it had turned an unused 8-hectare (50-rai) plot of land into a banana plantation and “green” area near Muang Thong Thani Lake on the outskirts of the capital.

The company manages the Impact Arena, the second-largest convention center in Asia, and the Muang Thong Thani residential complex on the shores of the lake of the same name.

The company’s publication says that a deserted area of 8 hectares on the shores of the lake is turned into a banana plantation with more than 10 thousand trees. Bananas from the plantation are planned to be supplied to Impact Kitchen’s food department.

“Since the CEO wants to use a 50-rai plot of land near the Muang Thong Thani lakefront, the relevant departments have been instructed to plant banana trees to supply Impact Kitchen,” the report said. “This agricultural project began late last year. Our banana trees will grow, and we are confident that they will soon bear fruit.”

A short time later, the innocuous post, consistent with the popular “green” agenda, received more than 5,000 reactions. The company’s message was shared more than 3,000 times. The news about the banana plantation unexpectedly garnered several thousand mostly negative comments.

Most of the comments claim that the real purpose of the project is to avoid paying a significant land tax in Thailand by turning an unused site into an agricultural site where the land tax rate is much lower.

“I get it. The tax will be much lower,” commented Kittipong Boonthong.

“Very funny,” Sasini Taptimthong said.

“The cost of planting bananas is much cheaper than the land tax, right?” asked Mo Na.

“People have understood the true meaning of the plantation,” Araya Patcharapa stated.

Given the lowest median land price of 30,000 baht per 4 square meters (1 Tarang Wah), according to the Nonthaburi Land Office, the 8-hectare plot should be valued at a minimum of 600 million baht.

Tax on unused land in Thailand is 0.3 percent per year of the land value, so the tax on such a plot should be about 1.8 million baht. However, agricultural land is taxed at only 0.01 percent per year, so the tax on such land would be only 60,000 baht.

Bananas are one of nine crops that can be grown on a plantation to receive a low tax rate as for agricultural land. In addition to these, coffee trees, rambutans, guava, tamarind, lemons and rubber trees can be grown as cultivated crops, and animals like cattle, pigs, poultry and aquaculture can be raised.

It’s worth noting that Impact Exhibition Management isn’t the only company that has taken advantage of the land tax reduction with bananas. Some Bangkok landowners have also planted bananas on vacant lots of expensive land in the city center to avoid the high tax if they go unused. In addition to bananas, another popular crop for plantations is lime.

Satang.info

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