Thaksin's Shin Corp sale nets a bill from taxman

Thailand's former prime minister Thaksin Shinawatra during an interview in Singapore, on Sept 24, 2012.
Thailand's former prime minister Thaksin Shinawatra during an interview in Singapore, on Sept 24, 2012.PHOTO: BLOOMBERG

Thailand's Revenue Department is pressing former prime minister Thaksin Shinawatra to settle 16 billion baht in what it says are taxes from more than a decade ago.

This comes amid growing pressure on the government to find ways to chase after taxes before the statute of limitation lapses.

Thai Deputy Prime Minister Wissanu Krea-ngam said earlier this month that it has a March 31 deadline for collecting the money.

Thaksin's supporters have challenged the tax bill, saying it is politically motivated.

His legal adviser said yesterday that there were no legal grounds for the Revenue Department to demand taxes from capital gains obtained over the sale of 49.6 per cent stake in Shin Corp to two nominees of Singapore's investment company Temasek Holdings - Cedar Holdings and Aspen Holdings - in January 2006.

Thaksin's family netted about 73 billion baht from the sale.

His adviser, Dr Noppadon Pattama, who was foreign minister in 2008, said: "The matter has already been settled but the government thinks otherwise. People will judge for themselves why the government is pursuing this case despite clear legal opinion."

The tax case has been subjected to court reviews and decisions over the past decade and stems from the purchase of 329 million Shin Corp shares by Thaksin's children, Panthongtae and Pinthongta, at one baht each, from Ample Rich, an offshore holding company controlled by the Shinawatra family.

In 2006, the siblings sold the shares in their name to Temasek through the Stock Exchange of Thailand for 49.25 baht each, reaping about 16 billion baht in profit.

The following year, Thaksin was ousted and the government went after his children for tax on the capital gains on the share sale.

In 2010, the Supreme Court ordered the seizure of Thaksin's assets and ruled that his children were mere proxies holding the shares for him. In 2012, a government committee also concluded the siblings were acting as proxies.

The government says the summons issued 10 years ago to Thaksin's children also applies to him, meaning that he has to pay tax on the capital gains from the 2006 share sale.

Mr Kan Yuenyong, executive director of think-tank Siam Intelligence Unit, said that the latest move is likely a warning to Thaksin, who is in self-exile in Dubai, and to the Puea Thai party.

"The big picture is that the government, representing the so-called conservative elites, would like to eradicate the influence of Mr Thaksin from Thai politics," Mr Kan told The Straits Times over the phone."If elections are to be held, the Puea Thai party is most likely to dominate again and the government will do anything they need to do to reduce Mr Thaksin's influence."

Thailand awaits the promulgation of a new Constitution that will pave the way for general elections to be held, most likely by next year.

A version of this article appeared in the print edition of The Straits Times on March 28, 2017, with the headline 'Thaksin's Shin Corp sale nets a bill from taxman'. Print Edition | Subscribe