BBS AUG 18

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BUSINESS SUPPLEMENT Cover Story LAND PRICES SOAR IN BANGKOK According to a report released by the property consultant firm CBRE, land prices in central Bangkok have increased by about 1,000 percent in the 30 years since CBRE established an office in the Thai capital. While this is hardly surprising, the pace of price growth appears to have accelerated since the turn of the century and this growth has been especially noticeable since 2015, in the year after the military launched a coup and ousted the civilian government. baht in the early part of 2015. CBRE claims the average price per square wah is now around three million baht with no sign of a slowdown. CBRE notes that the increase in land prices has not been uniform and there has been a major change in the development patterns in Bangkok as a whole. The property consultant noted that while Bangkok grew during the 1970s and 1980s it did not have a clearly defined city centre. It is only since the two key the most popular BTS and MRT lines, although the land price increases are far from uniform. With stricter planning and building regulations land prices can vary quite markedly, even within the confines of what is now considered the Bangkok city centre. CBRE states that land prices are now a much greater proportion of total development costs than they once were and these costs have outstripped construction expenses. Indeed, a quick look at prices per square wah in figures released by CBRE shows a fairly flat line between 1988 and 1992 followed by modest increases up to the advent of the 1997 Asian Financial Crisis. Yet by 1998 and into 1999 the price per square wah passed the 500,000 baht mark, showing just how quickly Thailand was bouncing back from the nadir of the economic crisis. The price of a square wah in central Bangkok passed the magical million baht mark around 2007 and then went past two million High Tower Co., Ltd. Tel: 038 411 009 public transport developments, the opening of the BTS (Skytrain) at the end of 1999 and the underground railway (MRT) in 2004, that central Bangkok has become more defined. CBRE states that by about 2025, Bangkok will have around 460 kilometres of mass transit lines. By comparison, the London Underground is 402 kilometres. The popularity of the mass transit routes sees around 1.2 million users a day, and this will rise as more lines are opened. This has meant great increases in land values near to Despite the hike in costs, CBRE expects central Bangkok will remain the preferred location for the higher end hotels, offices, retail centres and the like. Of course, the market will still be governed by affordability. CBRE suggests a lot of older buildings will come under the wrecking ball since the value of the land upon which they sit is so much higher than the building itself. One prominent example of this is the Dusit Thani Hotel, where there are plans to demolish the existing structure and redevelop the site. For all your advertising enquiries - Tel: 0846 77 43 60
THAILAND’S VAT RATE TO REMAIN AT 7 PERCENT FOR ANOTHER YEAR BUSINESS SUPPLEMENT The cabinet has given the go-ahead for the value added tax (VAT) rate in Thailand to continue to be set at 7 per cent for another year, until the end of September 2019. It has been at 7 per cent since 1997 and has been extended at that rate for many years. Before that, since its introduction in 1992, it was set at 10 percent. It was cut in 1997 in response to private sector requests and served to cushion the blow of the Asian economic crisis which started in 1997 and which hit the Thai economy hard in the years following. The argument for continuing to keep the rate at 7 per cent now was based on the possibility of a VAT rate hike impeding the fragile economic recovery as well as hurting the farm sector. Nathporn Chatusripitak, an adviser to the PM’s Office Minister was quoted as saying, “The Thai economy is now in an uptrend, while farm prices are increasing,” adding, “Any VAT hikes may possibly derail such trends.” In Asia, Thailand’s VAT rate is quite in keeping with the general range of VAT rates across the region. For example Indonesia and the Philippines both have a 10 per cent VAT rate, whilst Singapore has a 7 per cent rate, the same as Thailand. Japan is slightly higher at 8 per cent, whilst Taiwan is lower at 5 per cent. Hong Kong and Macau stand out as having 0% VAT rates. Many of the Middle Eastern countries including Saudi Arabia, Oman and the UAE also have 0% VAT rates, or more simply, no VAT at all to pay. Thailand has competitive rates with the USA also. In the USA, VAT rates, or “sales tax” rates as they are otherwise known, vary by state, but are typically between 4.5 per cent and 7 per cent. Go west to Europe however, and VAT rates are almost bearing towards the point where they are simply taking advantage of citizens. The UK’s VAT rate has hardly ever gone down and was already set high when it was introduced fully in 1979 at 15 per cent. It was increased in 1991 to 17.5 per cent and then to 20 per cent where it stands currently. The most likely next move is probably another increase again! Europe’s VAT rates are even higher. Straight away, EU law forces all countries to ensure VAT is in force at a rate of at least 15 per cent, but most EU countries have much higher rates. Ireland has a 21 per cent VAT rate. Several other EU countries have rates of 23 to 25 per cent. Hungary has the highest rate in the world at 27 per cent. These sky-high taxes make Thailand’s VAT rate look positively low in comparison. From Business Cards to Posters, Brochures to Menus, Pull Up Banners to Light Boxes We Supply It All VIP Card Brochures Pull Up Banners Menus Slim LED Light Boxes Name Cards With our cutting-edge technology and professional human resources, we can provide you with a total one-stop shop for all your printing needs. We bring your work to life! BANGKOK PATTAYA business cards thailand/printing 084 599 7315 081 650 6868 anna@royalsiamprintingservices.com Email: ben.hightowerltd@gmail.com www.Thailand-Business-Supplement.com
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BBS AUG 18

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