The meeting follows a Revenue Department petition to the Council of State querying whether the OAG was authorised to investigate its senior officials.

Revenue Department director-general Sirote Swasdipanich has asked the Council to outline the scope of the OAG's "duty", according to a source at the department.

Sirote and four other senior

officials - deputy director-general Paitoon Pongkesorn, director of the bureau of legal affairs Moreerat Boonyasiri, tax official Krich Vipulanusarn and Finance Ministry inspector Bengja Louichareon - have been in the hot seat since OAG investigators started a legal procedure to question them last month.

The reaction by the Revenue Department came as a surprise to investigators. "There has never been a state agency targeted by the Auditor-General, questioning its legal duty," an OAG source said.

He insisted that, as an independent organisation assigned by the Constitution, the OAG had a legal obligation to investigate tax collection. "We are wondering why the Council of State asked to meet us, instead of requesting to meet the tax officials," the source said.

In January, Premier Thaksin Shinawatra's family sold a majority stake in Shin to Singapore's Temasek Holdings for about Bt73 billion. The tax-free deal caused a public outcry and sparked the political crisis.

Just before the deal, Thaksin's two children bought 329.2 million Shin Corp shares from Ample Rich for one baht each. Ample Rich was created by Thaksin, the founder of Shin, and registered in the British Virgin Islands, a tax haven.

Critics argued that Thaksin's children should pay income tax of Bt5.85 billion because they reaped a capital gain. The shares had a market price of Bt49 each and the deal took place outside the stock market.

But the Revenue Department defended the deal, saying no tax was due as people who bought shares at below market value should not pay tax while they held those securities.

The two later sold the shares on the stock market, which gives tax exemption for capital gains received by individual investors.

OAG investigators want to probe if top Revenue officials helped the PM's children evade tax.

The department believes the OAG has no legal authority to investigate a tax case and is seeking confirmation from the Council of State. At best, it would only send tax information to the OAG, the source said.

Tax officials insist OAG has no authority because they must first finish taxing the Shinawatras, with payments due next year for business transactions this year. The OAG may have authority once tax was collected, the source claimed.

Wichit Chaitrong

 The Nation