Published on January 27, 2006
The PM has a moral duty not to duck taxes in Temasek and other business transactions
Re: “Avoiding taxes on Shin sale was just smart business on part of Thaksin and family”, Letters, January 25.
First, allow me to thank Songdej Praditsmanont for taking the time to write a very constructive letter. In brief, I think I am correct in summarising his position that as long as it is legal, taking the route towards the least tax is “the legal right” of individuals. My response is yes, he is correct, but is it also the “moral right” of individuals and particularly an individual who happens also to be the country’s prime minister? The question of taxes unpaid by the Shinawatra family is not restricted to the most recent sale to Temasek, but rather dates back to the still-ongoing debate on the apparently inconsistent rulings by the Revenue Department regarding the tax liability incurred through the transfer of shares from Thaksin and his wife to their children and her brother. Specifically regarding the most recent sale, however, I am of the opinion that the exemption in its current form is unnecessary and leads to exploitation (and significant loss of tax revenue). Surely, exemptions should include only those investors who both bought and sold shares in the market and not proprietors who are selling shares held prior to the company’s listing. My point on questioning the Shinawatra family’s recent sale is that it is clear he used all his knowledge to ensure that no taxes were paid. After all, Temasek is quite clear that their true target is AIS and not any of the other of subsidiaries of Shin. The most straightforward transaction would thus be for Shin to sell its stake in AIS directly to Temasek. This, as has been widely reported, would cause Shin and, indirectly, the Shinawatra family to incur a huge tax bill. The fact that the Shinawatras chose not to do this, but instead chose to sell Shin, clearly indicates that specific action was taken so that no taxes would be paid. Is this the right example for a prime minister to set for citizens? After all, what is the lesson? To do whatever you can to avoid paying tax (as long as it’s legal)? If that is the example Songdej feels the prime minister is correct in setting, then he and I will simply have to agree to disagree. On Songdej’s other recommendations for us to work on uncovering potential insider trading and share manipulation over the past few weeks – thank you and we will do just that. We will also assess whether the Security and Exchange Commission’s waiver for Temasek not to have to issue tender offers for Shin’s subsidiaries was fair for minority shareholders. Korn Chatikavanij Deputy secretary, Democrat Party Bangkok ----------------------------- FTA would give US a ‘free ticket’ to plunder Kingdom Re: “NHRC calls for halt to talks with US”, News, January 24. First, let me say that I’m an expatriate from the US, now residing in Thailand. I plan on living here for the rest of my life. I wholeheartedly agree with Lawan Thanadsillapakul’s statement that a free-trade agreement (FTA) with the US would not boost Thailand’s economy and that most of the income generated from investment in Thailand would go to money-hungry corporate America. I look at an FTA with the US as a “free-ticket agreement” that enables them to come to Thailand and take advantage in any way they can. They will siphon off as much of the country’s riches as they can get their hands on and leave Thailand with the spoils. I also agree that you will probably have to sell your souls and bow to US domestic laws as part of the agreement. It seems as though my ex-country wants the entire world to fashion itself in its image. I’m sure the only ones that would profit from this are big business and those controlling them. You can see by looking at the US that big business there will do anything at any cost to satisfy the bottom line. Corruption is almost a business-as-usual attitude. Please don’t sacrifice your entire culture by signing an agreement that will only help the already-rich in both countries. The Udon Cajun Udon Thani ----------------------------- Thailand has good cause to avoid US security initiative Re: “‘Thaksinisation’ strains Thai-US relations”, Opinion, January 23. As Kavi Chongkittavorn correctly points out, one of the important side issues in the troubled Thai-US relationship is Thailand’s reluctance to join the US-initiated and -driven Proliferation Security Initiative (PSI). But in not joining, Thailand is in good company, for good reasons. Despite strong US pressure, the only public PSI participants in Southeast Asia are Singapore and the Philippines. Many others in Asia, including China and India, have shied away, because the PSI lacks sufficient accountability, stretches the fundaments and limits of existing international law, undermines the UN system, impedes legal trade, has limited effectiveness and is politically divisive. Thailand needs carefully to weigh the negative implications of joining the PSI, especially for its trade relations, as well as for its political relations with its territorial and maritime neighbours. Thailand should not leap before it looks – very carefully. Mark J Valencia Maritime-policy analyst Kaneohe, Hawaii ----------------------------- Thai Beverage listing would be a financial and moral loss Re: “No reason why liquor listing would not be transparent”, Letters, January 24. I would like to clarify that in my original letter (“Officials should be lauded, not vilified, for blocking Thai Beverage’s SET listing”, January 22), I thanked only some Securities and Exchange Commission (SEC) members for showing moral integrity by opposing Thai Beverage’s listing efforts. Anyway, as an opponent of the listing of any liquor/beer company, I’d like to clarify three things. First, those who oppose Thai Beverage’s listing plan do so not just on moral grounds, but also on economic grounds. You see, the total market capitalisation of the Thai stock market is now about Bt5 trillion. If Stock Exchange of Thailand (SET) president Kittiratt na Ranong’s forecasted figure of Thai Beverage’s market cap were to come true (Bt200 billion to Bt300 billion), we could safely say that if it failed to make as high a profit as had been speculated, the company’s stock would drag the SET Index down, and thousands of shareholders would be hit hard. And according to the company’s official earnings figures submitted to the SEC, Beer Chang income is falling fast, due to several factors. Moreover, unlike oil or natural gas, liquor and beer are something people can live without, and therefore Thai Beverage is not going to be an insulated stock. Second, Thailand earns Bt50 billion to Bt60 billion in revenue from alcohol-related businesses but spends more than Bt600 billion a year on treating those suffering drinking-related illnesses. And we cannot count the value of human lives in baht. Third, as for the argument that Thais will drink Thai Beverage’s products anyway, whether the company gets listed here or elsewhere, I can clarify that there is a big difference. Thai Beverage would prefer to list on the SET because it gives newly listed companies a five-year tax reduction. It also insists on listing here because by doing so, the company would effectively build a human shield made up of hundreds of thousands of Thai shareholders, possibly including high-level politicians and MPs who would help Thai Beverage oppose any move, measure or bill against its liquor and beer businesses, such as increases in duties, measures to limit alcoholic consumption and restrict advertising, anti-drinking laws and so on. It also knows that the Public Health Ministry’s proposed legislation, if passed, could seriously harm the business of any producer of alcoholic beverages; that is why it is trying to rush an initial public offering. Rak Chao Thai Bangkok ----------------------------- Privatisation might help Egat catch up with the times I see several positive things under PM Thaksin’s administration and want to share a few with other readers. I live in Klong Luang district in Pathum Thani, where thousands of middle-class people have flooded in to buy houses and live. I see the impressive advancement of the services and hospitality of the district office when I do business there. The officers give quick service and show signs of proper training to serve all people. I also received similar treatment from the nearby Land Transportation Office, where it takes only a few minutes to complete my annual car tax payment. However, there is still a big difference with the Egat staff working in the same area. I bought a new house and did all that was required, including making a payment with Thanyaburi district’s Provincial Electricity Authority. They said they could provide me with electricity within three days, but it’s now been more than a month, and they still have no explanation for me. I contacted them several times just to hear the same useless promises. Besides, the customers cannot contact staff members via the telephone. Nobody answers your calls. I talked to friends and neighbours, and they have experienced similar problems. This indicates the poor and outdated management of Egat in this area. The Egat staff here obviously cannot adapt themselves to the modern world, and this requires urgent reform and a new administrative team. I don’t know much about the privatisation plan of Prime Minister Thaksin but if it is to enhance the service and efficiency of Egat, I now fully support the idea. Frustrated with Egat Pathum Thani
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