The Revenue Depart-ment has decided to take legal action against former Prime Minister Thaksin Shinawatra's children after they failed to pay personal income tax on the controversial Temasek Holdings takeover of Shin Corp, marking an abrupt change in departmental policy.

Department director-general Sirote Swasdipanich told a press conference: "I ordered tax officials

to proceed with the legal action to collect personal income tax from Pan-thongtae and Pinthongta."

Earlier, he was in the hot seat for of his department's failure to collect a single baht in tax from Thak-sin's children.

Sirote yesterday, however, said Thaksin's children were supposed to pay tax of 37 per cent on the sale of 329.2 million shares previously held by Ample Rich Investments - a Shinawatra family company registered in the British Virgin Islands tax haven.

Panthongtae and Pinthongta were supposed to pay their tax bills by September 30, the deadline for half-year tax payments for non-salaried income earners.

However, Sirote said they had submitted no payment, so the department would proceed with legal action by inviting them to report to officials.

He failed to disclose the sum that Thaksin's two children were supposed to pay or reveal whether they would face a fine.

Sirote said it depended on the agreement reached between the department and the ousted premier's offspring, and if they did not agree, they could appeal to Tax Appeals Bureau.

Tax lecturers have estimated the two were supposed to pay about Bt5.8 billion in taxes, because they received a net profit of Bt15.88 billion from the transaction. Normally, failure to meet a tax deadline would incur a fine and lead to a doubling of the payment.

Sirote said he reported the department's action to Depu-ty Prime Minis-ter and Finance Minister MR Pridiyathorn Devakula. When Thaksin was in power, the department insisted the premier's children were not required to pay any tax.

The Revenue Department's change of position came after the coup. Now the Office of the Auditor-General (OAG), the National Counter Corruption Commission (NCCC) and the Assets Examination Committee (AEC) are investigating the tax controversy related to the Temasek-Shin deal.

Asked why the Revenue Depart-ment was changing its stance, Sirote said the department had obtained new information suggesting tax should be paid by anyone who made a profit of more than Bt40 on the stock exchange. "Collecting taxes is a matter of duty. If we fail to perform our duty, tax officials could be put in jail," said Sirote.

Panthongtae and Pinthongta bought 329.2 million Shin shares from Ample Rich at Bt1 apiece and then sold them to Temasek for Bt49.25 each, netting Bt18.9 billion from the transaction. The share sale was part of the Bt73.3-billion transaction of the Shinawatra and Damapong families and Singapore's investment arm, Temasek.

The deal sparked a public outcry, because the Revenue Department had earlier said the Bt73.3-billion Shin-Temasek was tax free, because individual investors selling shares in the stock market were exempt from taxes.

After the Administrative Court jailed three former Election Commissioners for their mishandling of the invalid April general election, the OAG started to investigate the Revenue Department, examining whether Sirote and senior officials had failed to perform their duties honestly.

Sirote yesterday dismissed rumours that political pressure caused him to change his position and denied he had been reported to the OAG, the NCCC or the AEC.

He said the OAG was an independent body empowered to investigate any government agency and that if the AEC asked for more information, it would be kept abreast of developments.

Wichit Chaitrong

 The Nation

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