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Telecom laws were manipulated to benefit Shin Corp subsidiary AIS, says court

The majority of Supreme Court judges ruled on Friday that the defendant, Thaksin Shinawatra, used his authority as prime minister to pass an executive decree imposing telecom excise and used a Cabinet resolution to convert telecom concession fees into telecom excise, which benefited his company Shin Corp, the owner of Advanced Info Service (AIS).

The move also discouraged new entrants and financially weakened state telecom concession owners.

The court argued that if the government of the day, then headed by Thaksin, wanted to seek more tax revenue for the state by collecting tax on telecom services, it had no reason to allow private telecom concessionaires to deduct the excise payment from their concession fees paid to TOT and CAT Telecom. The deduction instead financially affected TOT, which owns the AIS concession, as TOT's concession fee from AIS went down.

The telecom excise also discourage new entrants, who would have been subjected to telecom excise and licence fee to be paid to the National Telecommunications Commission while at the same time having to build up market share against the incumbents.

In early 2003, the Thaksin administration issued executive decrees to impose telecom excise with a ceiling of 50 per cent before fixing telecom excise at 10 per cent for cellular-phone service and 2 per cent on fixed-line service.

In February 2003, another Cabinet resolution allowed private telecom concessionaires to deduct the excise-tax payment from their concession fees paid to TOT and CAT.

Prosecution witness Somkiat Tangkitvanit, vice president of the Thailand Development Research Institute, told the court in his testimony last month that as telecom service benefited all of society it should have been promoted widely, instead of being subjected to telecom excise.

Finance Ministry permanent secretary Sathit Limpongpan said in his testimony that the government should fully support telecom service to promote communications, and the imposition of excise on any product or service would pass on the burden to consumers.

The Surayud Chulanont government eliminated the telecom excise.

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