Thaksin 'can't be penalised twice'

Thaksin 'can't be penalised twice'

The Revenue Department will not pursue any tax claims against Thaksin Shinawatra for the 2006 sale of shares of Shin Corp to Singapore's Temasek Holdings.

Satit Rungkasiri, the director-general of the Revenue Department, said the tax authority could not file a duplicate claim for damages considering the penalties already levied against the former prime minister following last year's judgement by the Supreme Court.
He was responding to questions on why the department declined to appeal against a judgement by the Central Tax Court in December dismissing a tax case against Thaksin's children, Panthongtae and Pinthongta.
Mr Satit said that following the court ruling, the Attorney-General's Office was consulted on whether to appeal.
Prosecutors recommended against an appeal, considering that both the Tax Court and the Supreme Court had followed a similar argument that Thaksin, not the two children, had been the ultimate owner of the Shin shares from the beginning. As a result, neither Mr Panthongtae or Ms Pinthongta received income from the Temasek sale nor were they liable for taxes.
The Revenue Department later asked for guidance from the Finance Ministry, which in the end agreed with the decision not to appeal against the Tax Court ruling.
"There was a consensus to not file an appeal. Once the court ruled that the shares belonged to [Thaksin], then the [Ample Rich] sale to the children was actually a 'hidden' transaction and in fact, the sale involved that of [Thaksin] and [Temasek]," Mr Satit said.
Thaksin sold his 49.6% stake in telecom giant Shin Corp to Temasek Holdings in January 2006 for 73 billion baht.
The transaction, done through the Stock Exchange of Thailand (SET), was made without capital gains tax under a long-standing exemption on individual share sales made in the market.
After the September 2006 military coup, Thaksin's assets were ordered frozen pending an investigation. The Supreme Court in February 2010 found Thaksin guilty of corruption for enacting policies benefiting his telecom company, Shin Corp, while serving as prime minister from 2001-2006.
The Supreme Court ordered the confiscation of 46 billion baht from the Shinawatra family, based on the gains in the value of Shin Corp shares from the date Thaksin took office in 2001 to when the family sold its Shin shares to Temasek in January 2006.
The actual share sale in 2006 was complicated by Thaksin's own investment strategy that held a portion of the shares in an offshore holding vehicle known as Ample Rich Investment. Days before the Temasek sale was announced, Ample Rich sold off some 329.2 million Shin shares to Mr Panthongtae and Ms Pinthongta for one baht per share. The two later sold the same shares to Temasek for 49.25 baht each, receiving a capital gain of nearly 16 billion baht.
The Revenue Department had filed a separate case against Mr Panthongtae and Ms Pinthongta seeking 12 billion baht in taxes for capital gains received from the share sale to Temasek.
But the Central Tax Court in late December argued that the shares were actually owned by Mr Thaksin all along, in line with the Supreme Court ruling, and as such Mr Panthongtae and Ms Pinthongta were not liable for any taxes on the deal.
But former finance minister Korn Chatikavanij criticised the logic used by the Revenue Department in the case.
"If the department refuses to assess taxes due to argument that it was a 'hidden transaction', then it must answer what part can be considered void? Just the part involving tax liability? Because the actual share sale to Temasek certainly took place," Mr Korn said on Facebook.
He said the transaction between Ample Rich and Thaksin, as done through his children acting as nominees, was a clear transaction between a company and an individual outside of the SET and so subject to tax.
"I don't believe that this is fair at all to all Thais who have a duty to pay taxes," he said. "If the department grants an exception in this case, then there will certainly be questions about whether doing so is suitable or correct."