Tax probe into Santika pub

The move could lead to legal changes if the government moves to stop people taking advantage of a loophole in current laws and collect more tax.

Deputy Finance Minister Pruekthichai Damrongrut set up a committee yesterday to determine if bosses of the notorious nightclub sought to evade paying tax.

He said the committee should come up with conclusions within 15 days and the fact finding would be used to close a loophole in excise tax laws if entertainment operators were found to be utilising a gap in the legislation.

He said the ministry wanted to improve its tax collection and manage the changing business environment, in which some operators sought to tailor the description of services they provided in order to evade paying tax. The Santika pub did not register to pay tax as a discotheque or nightclub entertainment services as its bosses allegedly claimed it was a different type of business.

The committee will be chaired by Sathit Limpongpun, deputy permanent secretary for finance.

The Excise Department currently collects excise tax from discotheques and nightclubs totalling about Bt100 million from 28 operators, according to one senior official. The tax rate was allegedly 10 per cent of their income.

He said the Santika pub was listed as a restaurant, not a disco or nightclub. So the department did not collect tax from it.

However, if the committee finds that Santika bosses sought to evade paying tax, the Excise Department could demand two times the amount it should have paid, plus impose a penalty of 1.5 per cent of the sum sought.

Meanwhile, former politi¬cian and Bangkok governor candidate Chuwit Kamolvisit has claimed that 90 per cent of entertainment venues in Bangkok were actually illegal but were able to open because of legal loopholes.

The massage parlour king met with Bangkok Governor Sukhumbhand Paribatra yesterday morning to provide information about such venues and the legal loopholes. He urged the city to require operators to have two permits, one from the local officials to use a building as an entertainment place, and one from police.

The Santika club and many other clubs of Bangkok had neither, he claimed. Most venues were illegal in this regard, such as those in Thong Lor and Ekkamai, because the entertainment zoning law only supported those in Sutthisarn, New Petchburi and Ratchada.

"Few people dare to talk of this issue. So I have to speak out, as I want the public to learn from the Santika Club fire that killed 66 people," he said.

Chuwit said he also wanted to meet with Finance Minister Korn Chatikavanij to discuss excise tax collection from these venues, as the government should be getting Bt10 billion a year, not Bt100 million.

He admitted it was hard for the city to control these venues because police had the power to inspect and close them. But he suggested the city could act if venues were seen as being a hazard to health.

Chuwit said he proposed strict enforcement of the number of guests allowed in venues. This could result in a long queue of people waiting outside venues as in other countries, wait¬ing for guests to leave before they get in.

He also proposed that city officials be given the authority to suspend use of a building with proper cause, rather than having to wait for a premises to collapse. And applications for building construction to the city must clearly state if it will be a commercial building or entertainment venue.

Chuwit vowed to expose illegal entertainment venues around Bangkok and urged police to take action.

Sukhumbhand said he would push for Bangkok Metropolitan Administration (BMA) to be given the power to issue permits for entertainment venues, rather than other agencies, so city officials have total power to solve problems, as in other major cities around the world.

He said laws needed to be amended to allow the BMA to add regulations, because there were many loopholes in major laws, especially in regard to the number of guests allowed in a given venue's space.