Saturday, April 21, 2007

Tax ruling may decide Shin verdict

Chatumongol remarks a blow to Thaksin kids

POST REPORTERS

Former central bank governor M.R. Chatumongol Sonakul's confirmation yesterday that shares transferred from a company to its staff should be tax-liable _ when he cited a past Revenue Department ruling _ means the ruling will likely be used as a yardstick for judging the Shin Corp-Ample Rich share transaction case. M.R. Chatumongol was commenting after he testified in his capacity as former director of the Revenue Department to the Assets Scrutiny Committee (ASC) inquiry into the case yesterday.

The panel had sought his confirmation on the Revenue Department's ruling, which was made in 1995.

Under the ruling, capital gains tax would be imposed on shares given as gifts and on those sold at below market price.

M.R. Chatumongol said some people had attempted to exploit legal loopholes to evade tax liabilities by transferring shares to individuals.

He referred to an employee stock option plan (Esop), popular at the time he was head of the Revenue Department.

Under the plan, an employer grants options to employees to buy shares at a price lower than market value.

In the light of this, he had asked the department's arbitration committee to issue an interpretation of the matter to plug the tax loophole.

The committee was chaired by then finance permanent secretary Aran Thammano.

M.R.Chatumongol, also a member of the committee at that time, said he agreed with the arbitration committee's interpretation, which was comprehensive and complete.

He said the interpretation would set a precedent for decisions on similar cases.

According to a source at the ASC, M.R. Chatumongol also confirmed to the Shin Corp inquiry panel that shares sold at a price lower than the market value were subject to taxation.

With his confirmation, the panel is confident that Panthongtae and Pinthongta Shinawatra, children of deposed prime minister Thaksin, are liable to pay income tax on the Ample Rich share deal, the source said.

After a six-hour meeting yesterday, the panel also agreed in principle that Ample Rich is subject to corporate income tax, although it has not decided how much the company must pay.

Ample Rich Investment sold 329.9 million shares in Shin Corp to the siblings for one baht apiece in January last year.

The siblings then sold their Shin shares to Temasek Holdings of Singapore for 49.25 baht apiece, making capital gains of over 15.8 billion baht.

Meanwhile, ASC spokesman Sak Korsaengruang said it is up to the government to decide on extending the committee's tenure.

The ASC is ready to accept whatever outcome _ whether or not it will be given more time to continue its work, said Mr Sak.

He said the ASC will try its best to finish all graft probes before its tenure ends.

After the committee's tenure expires, any work left unfinished will be transferred to the National Counter Corruption Commission (NCCC).

However, the NCCC's powers are still limited. The agency is not authorised to take over some of the committee's tasks, such as tax evasion cases. Also, it can take action only against state authorities.

Mr Sak urged the government and the National Legislative Assembly to consider amending the law governing the NCCC to give the graftbusters more power to investigate a wider range of cases, including tax evasion.

At the same time, the Finance Ministry yesterday re-submitted a complaint over the digit lottery case to the ASC.

The ministry lodged a complaint with the ASC on March 30, but it was rejected by the committee as incomplete as it failed to identify the alleged offenders accused of misusing the money from the sale of the digit lottery tickets.

Bangkok Post

Last Updated : Saturday April 21, 2007

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