BANGKOK — The military government said Tuesday it will be able to collect 16 billion baht in taxes from fugitive prime minister Thaksin Shinawatra through a “miracle of law.”
A government spokesman said it wouldn’t be necessary to exercise its absolute power under Article 44 to collect on the money sought over a 2006 stock deal, as officials had found an alternative – and creative – legal solution.
“It couldn’t be done,” Sansern Kaewkamnerd quoted Deputy Prime Minister Wissanu Krea-ngam from Tuesday’s cabinet meeting. “but it can be done through the miracle of the law.”
The government’s concern has been that it would be legally unable to demand the 16 billion baht because the tax department never formally demanded it from Thaksin before the deadline to do so expired five years ago. The “miraculous” interpretation to emerge yesterday was that such a notice sent to his children could also be considered to have applied to their father.
The 16 billion baht has been sought since 2007, after a change in government and a military probe concluded Thaksin’s two children owed the money from shares of Shin Corp. they bought from an offshore company called Ample Rich and resold for a profit.
Both the telecommunication and offshore companies were controlled by the Shinawatra family.
Buying the shares at a price much under market value, Panthongtae Shinawatra and Pinthongta Shinawatra resold them to a Singaporean holding company, profiting handsomely.
The pair did not pay any taxes as there existed no capital gains tax.
While the top tax official at the time agreed that they did not owe taxes, the Revenue Department changed its mind months later after Thaksin was ousted by the military, saying his children should have paid income taxes on the profit.
Both Shinawatras declined to do so, leading the Revenue Department to issue summons for them in 2007. Years later, in 2012, a committee concluded they had been acting as Thaksin’s proxies and were not responsible for the taxes.
But a summons was never issued to Thaksin within a five-year time period that ended in 2012, which meant he couldn’t be taken to court over it
‘Miracle of Law’
To get around that, the junta held a special meeting Tuesday during which it discovered the “miracle of law.”
As Thaksin’s children had been deemed, ex post facto, proxies of their father, the logic goes that the summons sent to them 10 years ago also applied, vis-a-vis, to Thaksin.
Thaksin is not expected to pay the 16 billion baht tax in the next 16 days, and when he fails to do so, the authorities will now have cause to send the matter to the courts.
It’s the latest legal contortion in a case that’s been decided, reconsidered and decided again over the course of a decade.
The Shinawatra children were originally declared exempt from taxation owing to the lack of a capital gains tax, despite existing Revenue Department rules that profit from selling company stock for less than market value by board members or employees should be assessed income tax.
At the time of the Shin Corp. deal, the acting head of the Revenue Department said the Shinawatras did not have to pay because they purchased the Shin Corp. shares from another firm which had not issued them.
But months later, after Thaksin was ousted by the military and the Revenue Department was under new leadership, a new ruling was made. Contradicting the earlier decision, the department said the pair should have paid income tax on the deal.
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