A German tax evader is suing the Liechtenstein bank LGT, claiming the institution failed to inform him that his supposedly confidential financial data was in the hands of the authorities.
The Liechtenstein Regional Court confirmed yesterday a report in Financial Times Deutschland that the civil proceedings would be heard next in Vaduz,the capital of the Alpine principality.
The real estate developer wants 13 million in damages, claiming the bank should have told him the German government had incriminating information against him. He said that had he known of the impending proceedings against him, he would have come clean to the tax authorities and avoided penalties.
The man, aged 66 at the time, was given a suspended prison sentence and a fine of 7.5 million for tax evasion.In 2008, Germany's intelligence services purchased a computer disk from a former LGT employee, which contained confidential data on hundreds of clients of several nationalities, many of whom were evading taxes.
Liechtenstein has strict banking confidentiality rules, though these are in the process of being relaxed owing to international pressure against so-called tax havens.
Friday, September 25, 2009
Austria taken off "grey list"
Austria has been promoted to the "white list" of countries that comply with international tax standards, according to the latest progress report by the body leading a global fight against tax havens.
Austria had been among several states resisting the adoption of rules on forwarding account details to other tax authorities.
The change had been expected because Austrian lawmakers voted earlier this month to relax the country's banking secrecy regulations.
The change paved the pay for the country to be removed from the Parisbased Organisation for Economic Cooperation and Development's "grey list"of countries not complying with international reporting norms.
The Austrian Finance Ministry says the country has signed 15 agreements on double taxation or exchange of information with other countries, a prerequisite for getting off the grey list.
"Many more agreements are being negotiated," ministry spokesman Harald Waiglein said in Vienna.
The grey list still includes nations such as Andorra, Monaco, San Marino, and the British territory of Gibraltar.
It was not immediately clear why Monaco was still named as a tax haven,as the small state had announced last Friday that it had also fulfilled the OECD's requirement by signing 12 bilateral agreements.
Austria had been among several states resisting the adoption of rules on forwarding account details to other tax authorities.
The change had been expected because Austrian lawmakers voted earlier this month to relax the country's banking secrecy regulations.
The change paved the pay for the country to be removed from the Parisbased Organisation for Economic Cooperation and Development's "grey list"of countries not complying with international reporting norms.
The Austrian Finance Ministry says the country has signed 15 agreements on double taxation or exchange of information with other countries, a prerequisite for getting off the grey list.
"Many more agreements are being negotiated," ministry spokesman Harald Waiglein said in Vienna.
The grey list still includes nations such as Andorra, Monaco, San Marino, and the British territory of Gibraltar.
It was not immediately clear why Monaco was still named as a tax haven,as the small state had announced last Friday that it had also fulfilled the OECD's requirement by signing 12 bilateral agreements.
Tuesday, September 22, 2009
DEVELOPERS ASSURED ON REVAMP
The Finance Ministry has assured land developers they will not face an unreasonably high tax burden under a planned property tax revamp.
The ministry is revamping the property-tax structure in an effort to plug legal loopholes that allow owners of some lands and buildings to escape paying taxes.
An informed source at the Finance Ministry involved in drawing up the new property-tax rules said provisions in the latest draft reflected advice from parties likely to be affected by the new measures.
One is that the ministry will offer a tax grace period, probably of two to five years, to land developers who accumulate plots for development. This land would be subjected to a tax rate of up to 0.5 percent of the land price and would double every three years if the land is left undeveloped.
Also, newly built homes awaiting buyers would be taxed at the same rate as residential units; no more than 0.1 percent per year.
Moreover, land and buildings used for many purposes - business, farming and residential, for example - would see each portion taxed accordingly, leading to payment of several tax rates by one landowner. Land used solely for farming would be taxed at no more than 0.05 per cent, the source said.
In addition, residential units worth less than Bt500,000 may be tax-exempt altogether.
Land developers have raised concerns that the revised property taxes would increase their business costs and adversely affect the property industry as a whole.
Some local governments may need to set up funds to buy land or provide loans or other financial support to those who can't afford to pay the newly required taxes, the source said. The central government is unlikely to set up such a fund, since property tax will be collected and managed by the local governments. However, this issue has not been finalised.
Finance Ministry officials expect to finalise drafting the new property tax rules by the end of this month, before submitting them to Finance Minister Korn Chatikavanij and the Cabinet, according to the source. If approved by the Cabinet, the bill will be considered by Parliament. If Parliament approves the bill, the ministry plans to enforce the new tax laws within two years.
Under the new tax rules, residence owners would pay up to 0.1 percent of the land price. Rates could vary depending on the local administration's rules. Land used for agricultural purposes would be taxed at no more than 0.05 percent. Undeveloped land would be subject to a high tax rate of 0.5 per cent, to be doubled every three years.
Also on the horizon are a 2-percent transfer fee on property changing hands; progressive rates of income tax; a 1.5-percent stamp duty; and a 3.3-percent specific business tax that are currently exempted under the government's economic stimulus package. Homebuyers and land developers have expressed fears that the tax-code revisions would add to an already-high tax burden.
The ministry is revamping the property-tax structure in an effort to plug legal loopholes that allow owners of some lands and buildings to escape paying taxes.
An informed source at the Finance Ministry involved in drawing up the new property-tax rules said provisions in the latest draft reflected advice from parties likely to be affected by the new measures.
One is that the ministry will offer a tax grace period, probably of two to five years, to land developers who accumulate plots for development. This land would be subjected to a tax rate of up to 0.5 percent of the land price and would double every three years if the land is left undeveloped.
Also, newly built homes awaiting buyers would be taxed at the same rate as residential units; no more than 0.1 percent per year.
Moreover, land and buildings used for many purposes - business, farming and residential, for example - would see each portion taxed accordingly, leading to payment of several tax rates by one landowner. Land used solely for farming would be taxed at no more than 0.05 per cent, the source said.
In addition, residential units worth less than Bt500,000 may be tax-exempt altogether.
Land developers have raised concerns that the revised property taxes would increase their business costs and adversely affect the property industry as a whole.
Some local governments may need to set up funds to buy land or provide loans or other financial support to those who can't afford to pay the newly required taxes, the source said. The central government is unlikely to set up such a fund, since property tax will be collected and managed by the local governments. However, this issue has not been finalised.
Finance Ministry officials expect to finalise drafting the new property tax rules by the end of this month, before submitting them to Finance Minister Korn Chatikavanij and the Cabinet, according to the source. If approved by the Cabinet, the bill will be considered by Parliament. If Parliament approves the bill, the ministry plans to enforce the new tax laws within two years.
Under the new tax rules, residence owners would pay up to 0.1 percent of the land price. Rates could vary depending on the local administration's rules. Land used for agricultural purposes would be taxed at no more than 0.05 percent. Undeveloped land would be subject to a high tax rate of 0.5 per cent, to be doubled every three years.
Also on the horizon are a 2-percent transfer fee on property changing hands; progressive rates of income tax; a 1.5-percent stamp duty; and a 3.3-percent specific business tax that are currently exempted under the government's economic stimulus package. Homebuyers and land developers have expressed fears that the tax-code revisions would add to an already-high tax burden.
Sunday, September 20, 2009
LAW, TAX REFORM TO FACILITATE WORLD TRADE
Deputy Finance Minister Pradit Phataraprasit yesterday promised to revise harsh penalties under customs laws and reform the trade taxation system in order to facilitate international commerce.
The Thai Chamber of Commerce, Federation of Thai Industries (FTI) and Thai Bankers' Association have complained about the Finance Ministry's plan to revise the laws and regulations related to customs duties.
Pradit said he would reduce the fine to between zero and four times the value of imported goods from the current four times and leave it to the courts to judge the appropriate rate.
Pradit pledged to the members of the Joint Public Private Committee at the seminar that he would reform the customs system.
He would within a month propose a law amendment to the Cabinet.
An overhaul of the system should lead to lower production costs for the private sector and greater transparency in tariff procedures.
The current high fine deterred importers from taking disputes to court and they are forced to pay fines to the Customs Department instead, he added.
Kittipong Urapeepatanapong, representing the Thai Chamber of Commerce, argued that the Finance Ministry should not press criminal charges on importers if they do not mean to break the law but fail to pay taxes in full due to some mistake or typographical errors in their documentation.
He also asked the ministry to allow importers to take tariff disputes to a special court, such as the tax court, not the criminal court.
Customs agents tend to impose high fines as they have the right to receive the lion share of the fine. Those who do not intend to evade duties should not be subject to severe penalties, he said.
Ponsathorn Ansusinha, representing the three organisations, said the Customs Department should limit the period for the tax appeals committee to rule on a tax case.
Charonchai Salyapong, representing the FTI, raised concerns about the Excise Department's plan to expand the excise tax base for tax calculations next year.
Although the tariff rates on goods would be cut to zero next year under the Asean free trade agreement, the Excise Department will collect higher excise taxes than today, he said.
The department plans to calculate taxes based on the old tariff rates, he said.
If the department does as it plans, it risks violating the free trade pact, he said.
The Excise Department wants to collect more taxes to offset the loss by cutting the rates on 18 products, including cars, alcoholic beverages and cigarettes, he added.
The Thai Chamber of Commerce, Federation of Thai Industries (FTI) and Thai Bankers' Association have complained about the Finance Ministry's plan to revise the laws and regulations related to customs duties.
Pradit said he would reduce the fine to between zero and four times the value of imported goods from the current four times and leave it to the courts to judge the appropriate rate.
Pradit pledged to the members of the Joint Public Private Committee at the seminar that he would reform the customs system.
He would within a month propose a law amendment to the Cabinet.
An overhaul of the system should lead to lower production costs for the private sector and greater transparency in tariff procedures.
The current high fine deterred importers from taking disputes to court and they are forced to pay fines to the Customs Department instead, he added.
Kittipong Urapeepatanapong, representing the Thai Chamber of Commerce, argued that the Finance Ministry should not press criminal charges on importers if they do not mean to break the law but fail to pay taxes in full due to some mistake or typographical errors in their documentation.
He also asked the ministry to allow importers to take tariff disputes to a special court, such as the tax court, not the criminal court.
Customs agents tend to impose high fines as they have the right to receive the lion share of the fine. Those who do not intend to evade duties should not be subject to severe penalties, he said.
Ponsathorn Ansusinha, representing the three organisations, said the Customs Department should limit the period for the tax appeals committee to rule on a tax case.
Charonchai Salyapong, representing the FTI, raised concerns about the Excise Department's plan to expand the excise tax base for tax calculations next year.
Although the tariff rates on goods would be cut to zero next year under the Asean free trade agreement, the Excise Department will collect higher excise taxes than today, he said.
The department plans to calculate taxes based on the old tariff rates, he said.
If the department does as it plans, it risks violating the free trade pact, he said.
The Excise Department wants to collect more taxes to offset the loss by cutting the rates on 18 products, including cars, alcoholic beverages and cigarettes, he added.
Friday, September 18, 2009
INCENTIVES TO BE EXTENDED IF ECONOMY FAILS TO PICK UP
The government would consider extending tax incentives to the property sector if the country were to experience weak growth next year, Deputy Finance Minister Pradit Pataraprasit said.
Speaking at a seminar on "Where is the best location for investment", Pradit said the government would lend its support to the property sector if the economy did not do well.
The seminar was organised by Krungthep Turakij, and three property associations - Thai Real Estate Association, Thai Condominium Association, and Business Housing Association.
The government earlier this year extended tax incentives to the property sector until March 28, 2010. The tax incentives include a reduction in the specific business tax on property sales from 3.3 per cent to 0.11 per cent and a cut in transfer and mortgage fees from 2 per cent to 0.01 per cent. It also increased the tax allowance on property sales from Bt100,000 to Bt300,000.
Meanwhile, mortgage loans in the property sector recorded only a 2.2-per-cent growth in the first half of this year due to the weakening economy. But the property market is expected to recover in the last quarter of this year as a result of credit growth.
Mortgage loans are expected to increase by 6.7 per cent, Chatchai Phayuhanaveechai, deputy managing director of KasikornBank, said.
If the government extends tax incentives to the property sector, that would help home-buyers to save costs by at least 5 per cent because the prices of construction raw materials have already risen, Wasan Kongchan, managing director of Agency for Real Estate Affair (AREA), said.
He added that if the tax incentives expire on March 28, 2010, prices of residences will increase 7 to 10 per cent next year - 4 per cent from tax and transfer fees - as a result of the rise in the cost of construction raw materials.
He added that demand for residences around the mass-transit system, especially Skytrain and underground trains, are popular for both home-buyers and investors as a result prices in these locations are likely to increase an average 10 to 20 per cent a year.
The areas are Sukhumvit, Ratchadaphisek, Silom and Sathorn.
However, the government's policy to extend Skytrain routes and underground train routes such as the Sathorn-Taksin and Onnuj-Baring routes will also drive demand for residential homes along the extended mass-transit system routes.
He added that if the government succeeds in the construction of the new Skytrain and underground train routes from inner city to around the city, that will change demand for residential projects from condominiums to low-rise residential projects located close to the new extended routes.
Speaking at a seminar on "Where is the best location for investment", Pradit said the government would lend its support to the property sector if the economy did not do well.
The seminar was organised by Krungthep Turakij, and three property associations - Thai Real Estate Association, Thai Condominium Association, and Business Housing Association.
The government earlier this year extended tax incentives to the property sector until March 28, 2010. The tax incentives include a reduction in the specific business tax on property sales from 3.3 per cent to 0.11 per cent and a cut in transfer and mortgage fees from 2 per cent to 0.01 per cent. It also increased the tax allowance on property sales from Bt100,000 to Bt300,000.
Meanwhile, mortgage loans in the property sector recorded only a 2.2-per-cent growth in the first half of this year due to the weakening economy. But the property market is expected to recover in the last quarter of this year as a result of credit growth.
Mortgage loans are expected to increase by 6.7 per cent, Chatchai Phayuhanaveechai, deputy managing director of KasikornBank, said.
If the government extends tax incentives to the property sector, that would help home-buyers to save costs by at least 5 per cent because the prices of construction raw materials have already risen, Wasan Kongchan, managing director of Agency for Real Estate Affair (AREA), said.
He added that if the tax incentives expire on March 28, 2010, prices of residences will increase 7 to 10 per cent next year - 4 per cent from tax and transfer fees - as a result of the rise in the cost of construction raw materials.
He added that demand for residences around the mass-transit system, especially Skytrain and underground trains, are popular for both home-buyers and investors as a result prices in these locations are likely to increase an average 10 to 20 per cent a year.
The areas are Sukhumvit, Ratchadaphisek, Silom and Sathorn.
However, the government's policy to extend Skytrain routes and underground train routes such as the Sathorn-Taksin and Onnuj-Baring routes will also drive demand for residential homes along the extended mass-transit system routes.
He added that if the government succeeds in the construction of the new Skytrain and underground train routes from inner city to around the city, that will change demand for residential projects from condominiums to low-rise residential projects located close to the new extended routes.
Tax benefits plan to boost reading
In a bid to promote reading habits, the Education Ministry is planning to offer tax benefits for people who like reading and book donors.
Education Minister Jurin Laksanawisit said yesterday that a committee was studying tax measures to see how they can encourage Thais to read more.
"Perhaps, we should offer tax refunds when people present receipts of previous book purchases," he said. "We could also offer tax deductions to private firms if they donate books."
According to Jurin, the committee is expected to present a proposal to the Reading Promotion Committee (RPC) on October 1. "We will then refer the proposal to the Cabinet." Jurin was speaking after a meeting with the RPC.
The committee has set several goals that it hopes to achieve by 2012, including getting Thais to read at least 10 books instead of just five per year.
Education Minister Jurin Laksanawisit said yesterday that a committee was studying tax measures to see how they can encourage Thais to read more.
"Perhaps, we should offer tax refunds when people present receipts of previous book purchases," he said. "We could also offer tax deductions to private firms if they donate books."
According to Jurin, the committee is expected to present a proposal to the Reading Promotion Committee (RPC) on October 1. "We will then refer the proposal to the Cabinet." Jurin was speaking after a meeting with the RPC.
The committee has set several goals that it hopes to achieve by 2012, including getting Thais to read at least 10 books instead of just five per year.
Tuesday, September 15, 2009
BOI SURVEY FINDS INVESTORS START TO RECRUIT AGAIN
A Board of Investment survey shows 42 per cent of promoted investors in six industries have hired more staff, thanks to signs of an economic recovery.
These firms are preparing to boost production to last year's precrisis level.
The survey covered 371 promoted companies having a minimum investment of Bt500 million each.
Secretary-general Atchaka Sibunruang Brimble said 155 companies, or 42 per cent of the respondents, reported hiring more employees in July, particularly in electrical appliances and electronics, raising their recruitment of temporary workers 62 per cent.
Forty-seven per cent of respondents maintained their recruitment at the same level as at the beginning of the year after most of them terminated some workers in the wake of the financial meltdown.
She said 94 respondents insisted they would expand their investment in Thailand this year by a combined Bt113 billion, while 200 companies had no expansion plan this year or would wait to see whether the global economy did recover.
Of that amount, Bt43.7 billion will come from the chemical, paper and plastic sectors, Bt21.8 billion from services and infrastructure, Bt19.1 billion from electric-appliances and electronics and Bt14.7 billion from the agricultural sector.
She said used production capacity would be maintained at 64.3 per cent, similar to last year but up from 61.5 per cent in 2007.
Meanwhile, the BOI yesterday set up a committee to revise regulations and incentives to attract more foreign companies to set up regional headquarters in Thailand.
The incentive revision will cover a reduction in corporate income tax, which is the main concern for the private sector, because Thailand's rate is much higher than in other places, including Singapore, Malaysia and Hong Kong.
"Despite being a production hub for several industries, including autos and electronics, foreign firms do not set up their headquarters in Thailand, due to the high tax rate. Therefore, we've appointed a committee to reconsider and revise outdated regulations and incentives to attract them," said Industry Minister Charnchai Chairungrueng.
The committee will be led by Deputy Finance Minister Pradit Pataraprasit and consist of representatives from both the private sector and state agencies, including the BoI, the Fiscal Policy Office, the Revenue and Business Development departments, the Bank of Thailand, the Federation of Thai Industries and the Board of Trade.
He said the revision would be finished in two months.
So far, 81 companies have won BOI tax incentives to set up their regional headquarters here, including Exxon Mobil, Asian Honda Motor and Chevron Asia South.
Charnchai said the board also agreed to set up a fund for technology and human-resource development aimed at increasing the Kingdom's competitiveness in research and development and innovation.
The fund will focus on promoting this type of investment among small and medium-sized enterprises.
The BoI's board also approved four investment projects worth a combined Bt16 billion, from Thai Airways International, Thai Samsung Electronics, Cataler (Thailand) and Sahaviriya Plate Mill.
These firms are preparing to boost production to last year's precrisis level.
The survey covered 371 promoted companies having a minimum investment of Bt500 million each.
Secretary-general Atchaka Sibunruang Brimble said 155 companies, or 42 per cent of the respondents, reported hiring more employees in July, particularly in electrical appliances and electronics, raising their recruitment of temporary workers 62 per cent.
Forty-seven per cent of respondents maintained their recruitment at the same level as at the beginning of the year after most of them terminated some workers in the wake of the financial meltdown.
She said 94 respondents insisted they would expand their investment in Thailand this year by a combined Bt113 billion, while 200 companies had no expansion plan this year or would wait to see whether the global economy did recover.
Of that amount, Bt43.7 billion will come from the chemical, paper and plastic sectors, Bt21.8 billion from services and infrastructure, Bt19.1 billion from electric-appliances and electronics and Bt14.7 billion from the agricultural sector.
She said used production capacity would be maintained at 64.3 per cent, similar to last year but up from 61.5 per cent in 2007.
Meanwhile, the BOI yesterday set up a committee to revise regulations and incentives to attract more foreign companies to set up regional headquarters in Thailand.
The incentive revision will cover a reduction in corporate income tax, which is the main concern for the private sector, because Thailand's rate is much higher than in other places, including Singapore, Malaysia and Hong Kong.
"Despite being a production hub for several industries, including autos and electronics, foreign firms do not set up their headquarters in Thailand, due to the high tax rate. Therefore, we've appointed a committee to reconsider and revise outdated regulations and incentives to attract them," said Industry Minister Charnchai Chairungrueng.
The committee will be led by Deputy Finance Minister Pradit Pataraprasit and consist of representatives from both the private sector and state agencies, including the BoI, the Fiscal Policy Office, the Revenue and Business Development departments, the Bank of Thailand, the Federation of Thai Industries and the Board of Trade.
He said the revision would be finished in two months.
So far, 81 companies have won BOI tax incentives to set up their regional headquarters here, including Exxon Mobil, Asian Honda Motor and Chevron Asia South.
Charnchai said the board also agreed to set up a fund for technology and human-resource development aimed at increasing the Kingdom's competitiveness in research and development and innovation.
The fund will focus on promoting this type of investment among small and medium-sized enterprises.
The BoI's board also approved four investment projects worth a combined Bt16 billion, from Thai Airways International, Thai Samsung Electronics, Cataler (Thailand) and Sahaviriya Plate Mill.
Monday, September 14, 2009
CHINA IRE OVER US TYRE TARIFFS
The decision by the US administration to impose tariffs on tyre imports from China will be a huge blow to the Chinese tyre producers and the Chinese government should take strong counter-measures against exports from America, an industry official said.
"President [Barack] Obama has increased duties to all imports of passenger vehicle and light-truck tyres from China for a period of three years," the White House said in a statement on Friday.
In addition to the existing duty of 4 per cent, tariffs will surge by a further 35 per cent in the first year, 30 per cent in the second and 25 per cent in the third. The tariffs will take effect any day before September 26.
"The new tariffs will be highly damaging to China's tyre industry," said Fan Rende, chairman of China Rubber Industry Association, adding that Chinese tyre companies may not be able to export tyres to the US due to the unreasonably high tariff of 35 per cent starting from next year.
"Obama's decision may affect the employment of 100,000 tyre workers in China and may bring an aggregated loss of $1 billion (Bt34.4 billion) to China's tyre exporters," Fan said.
There are currently twenty tyre makers in China and four of them are from the US. He did not reveals the names of the four producers, but currently US tyre manufacturers, such as Bridhestone/Firestone, Goodyear, Michelin and Cooper have operations in China.
Actually, the US had already ordered Chinese tyre companies to stop supplying tyres to the US, Fan said. "The order is effective immediately," he said.
Fan urged the Chinese government to take countermeasures against US tariffs, especially on US exports of agricultural products and cars to China.
"I believe we could find ample cases that are also in line with the WTO rule," he said.
China Rubber Industry Association, China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters as well as some affected companies had already signed a complaint letter to President Obama.
In addition, they are considering seeking justice from the United States Court of International Trade, Fan said.
"President [Barack] Obama has increased duties to all imports of passenger vehicle and light-truck tyres from China for a period of three years," the White House said in a statement on Friday.
In addition to the existing duty of 4 per cent, tariffs will surge by a further 35 per cent in the first year, 30 per cent in the second and 25 per cent in the third. The tariffs will take effect any day before September 26.
"The new tariffs will be highly damaging to China's tyre industry," said Fan Rende, chairman of China Rubber Industry Association, adding that Chinese tyre companies may not be able to export tyres to the US due to the unreasonably high tariff of 35 per cent starting from next year.
"Obama's decision may affect the employment of 100,000 tyre workers in China and may bring an aggregated loss of $1 billion (Bt34.4 billion) to China's tyre exporters," Fan said.
There are currently twenty tyre makers in China and four of them are from the US. He did not reveals the names of the four producers, but currently US tyre manufacturers, such as Bridhestone/Firestone, Goodyear, Michelin and Cooper have operations in China.
Actually, the US had already ordered Chinese tyre companies to stop supplying tyres to the US, Fan said. "The order is effective immediately," he said.
Fan urged the Chinese government to take countermeasures against US tariffs, especially on US exports of agricultural products and cars to China.
"I believe we could find ample cases that are also in line with the WTO rule," he said.
China Rubber Industry Association, China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters as well as some affected companies had already signed a complaint letter to President Obama.
In addition, they are considering seeking justice from the United States Court of International Trade, Fan said.
Sunday, September 13, 2009
Court sentences Sondhi to 2 years in jail
The Criminal Court has sentenced Sondhi Limthongkul to two years in prison without probation for defaming former deputy prime minister MR Pridiyathorn Devakula.
Mr Sondhi, a key leader of the People's Alliance for Democracy, was yesterday found guilty of libel in connection with remarks he made about MR Pridiyathorn during his Muang Thai Rai Sapda (Thailand Weekly) talk show, which aired on ATSV on Jan 12,2007.
Mr Sondhi was released yesterday on bail of 200,000 baht. He said he would appeal his conviction.
Named as co-defendants were Thaiday Dot Com Co, the producer of the talk show and operator of ASTV, the Manager Media Group and Khunthong Lorseriwanich, editor and publisher of the Manager newspaper.MR Pridiyathorn said Mr Sondhi accused him of approving the illegal sale of two- and three-digit lottery tickets and amending the law on the Government Lottery Office to clear 47 people,including former ministers and GLO executives, criticised by the former Assets Scrutiny Committee over the launch of the lottery in 2003.
MR Pridiyathorn, who was also finance minister at the time, said Mr Sondhi also accused him of protecting former revenue department chief Sirote Sawasdipanich from prosecution over his alleged failure to collect 270 million baht in taxes in the 1997 Shin Corp share case.
Mr Sirote was acquitted by the courts of the charge.
The Criminal Court found Mr Sondhi's claims were groundless and could lead people to misunderstand MR Pridiyathorn. The court also found Thaiday Dot Com libelled MR Pridiyathorn by recording and disseminating the claims on VCD. It was fined 200,000 baht. Mr Khunthong also libelled MR Pridiyathorn,the court said, by publishing the remarks in the Jan 13 to Jan 16,2007, editions of the Manager . The court sentenced him to one year in jail, suspended for two years, as he was a first-time offender.He was also fined 30,000 baht.
Mr Sondhi, Mr Khunthong and Thaiday Dot Com have been ordered to publish apologies to MR Pridiyathorn in newspapers for five consecutive days.The court acquitted Manager Media Group of the charge as there was no evidence implicating its executives.
Mr Sondhi, a key leader of the People's Alliance for Democracy, was yesterday found guilty of libel in connection with remarks he made about MR Pridiyathorn during his Muang Thai Rai Sapda (Thailand Weekly) talk show, which aired on ATSV on Jan 12,2007.
Mr Sondhi was released yesterday on bail of 200,000 baht. He said he would appeal his conviction.
Named as co-defendants were Thaiday Dot Com Co, the producer of the talk show and operator of ASTV, the Manager Media Group and Khunthong Lorseriwanich, editor and publisher of the Manager newspaper.MR Pridiyathorn said Mr Sondhi accused him of approving the illegal sale of two- and three-digit lottery tickets and amending the law on the Government Lottery Office to clear 47 people,including former ministers and GLO executives, criticised by the former Assets Scrutiny Committee over the launch of the lottery in 2003.
MR Pridiyathorn, who was also finance minister at the time, said Mr Sondhi also accused him of protecting former revenue department chief Sirote Sawasdipanich from prosecution over his alleged failure to collect 270 million baht in taxes in the 1997 Shin Corp share case.
Mr Sirote was acquitted by the courts of the charge.
The Criminal Court found Mr Sondhi's claims were groundless and could lead people to misunderstand MR Pridiyathorn. The court also found Thaiday Dot Com libelled MR Pridiyathorn by recording and disseminating the claims on VCD. It was fined 200,000 baht. Mr Khunthong also libelled MR Pridiyathorn,the court said, by publishing the remarks in the Jan 13 to Jan 16,2007, editions of the Manager . The court sentenced him to one year in jail, suspended for two years, as he was a first-time offender.He was also fined 30,000 baht.
Mr Sondhi, Mr Khunthong and Thaiday Dot Com have been ordered to publish apologies to MR Pridiyathorn in newspapers for five consecutive days.The court acquitted Manager Media Group of the charge as there was no evidence implicating its executives.
Friday, September 11, 2009
US taxpayers 'unlikely' to recoup auto bailout cash
US taxpayers face losses on a significant portion of the $81 billion in government aid provided to the auto industry, an oversight panel said in a report released yesterday.
The Congressional Oversight Panel did not provide an estimate of the projected loss in its latest monthly report on the $700 billion Troubled Asset Relief Programme.
But it said most of the $23 billion initially provided to General Motors Corp and Chrysler LLC late last year "is unlikely to be repaid."
"I think they drove a very hard bargain," said Elizabeth Warren, the panel's chairwoman and a law professor at Harvard University, referring to the Obama administration's Treasury Department."But it may not be enough."
"The prospect of recovering the government's assistance to GM and Chrysler is heavily dependent on shares of the two companies rising to unprecedented levels," the report said.
The government owns 10% of Chrysler and 61% of GM. The two companies are currently private but are expected to issue stock, in GM's case by next year.
The shares "will have to appreciate sharply" for taxpayers to get their money back, the report said.
For example, GM's market value would have to reach $67.6 billion, the report said, a "highly optimistic" estimate and more than the $57.2 billion GM was worth at the height of its share value in April 2008. And in the case of Chrysler,about $5.4 billion of the $14.3 billion provided to the company is "highly unlikely" to ever be repaid, the panel said.
Treasury Department officials have acknowledged that most of the $23 billion provided by the Bush administration is likely to be lost.
But Meg Reilly, a department spokeswoman, said there "is a reasonably high probability of the return of most or all of the government funding" that was provided to assist GM and Chrysler with their restructurings.
Administration officials have previous-ly said they want to maximise taxpayers'return on the investment but want to dispose of the government's ownership interests as soon as practicable.
"We are not trying to be Warren Buffett here. We are not trying to squeeze every last dollar out," Steve Rattner, who led the administration's auto task force, said before his departure in July.
"We do want to do well for the taxpayers but the most important thing is to get the government out of the car business."
Greg Martin, a spokesman for the new GM, said the company "is confident that we will repay our nation's support because we are a company with less debt, a stronger balance sheet, a winning product portfolio and the right size to match today's market realities."
The Congressional Oversight Panel was created as part of the Troubled Asset Relief Programme, or TARP.
It is designed to provide an additional layer of oversight, beyond the Special Inspector General for the TARP and regular audits by the Government Accountability Office.
The panel's report recommends that the Treasury Department consider placing its auto company holdings into an independent trust, to avoid any "conflicts of interest."
The report also recommends the department perform a legal analysis of its decision to provide TARP funds to GM and Chrysler, their financing arms and many auto parts suppliers. Some critics say the law creating TARP didn't allow for such funding.
The panel's members include Rep Jeb Hensarling, a Texas Republican, who dissented from the report. Hensarling said the auto companies should never have received funding and criticised the government for picking "winners and losers."
Other agencies have also projected large losses on the loans and investments provided to the industry. The Congressional Budget Office estimated in June that taxpayers would lose about $40 billion of the first $55 billion in aid.
The Congressional Oversight Panel did not provide an estimate of the projected loss in its latest monthly report on the $700 billion Troubled Asset Relief Programme.
But it said most of the $23 billion initially provided to General Motors Corp and Chrysler LLC late last year "is unlikely to be repaid."
"I think they drove a very hard bargain," said Elizabeth Warren, the panel's chairwoman and a law professor at Harvard University, referring to the Obama administration's Treasury Department."But it may not be enough."
"The prospect of recovering the government's assistance to GM and Chrysler is heavily dependent on shares of the two companies rising to unprecedented levels," the report said.
The government owns 10% of Chrysler and 61% of GM. The two companies are currently private but are expected to issue stock, in GM's case by next year.
The shares "will have to appreciate sharply" for taxpayers to get their money back, the report said.
For example, GM's market value would have to reach $67.6 billion, the report said, a "highly optimistic" estimate and more than the $57.2 billion GM was worth at the height of its share value in April 2008. And in the case of Chrysler,about $5.4 billion of the $14.3 billion provided to the company is "highly unlikely" to ever be repaid, the panel said.
Treasury Department officials have acknowledged that most of the $23 billion provided by the Bush administration is likely to be lost.
But Meg Reilly, a department spokeswoman, said there "is a reasonably high probability of the return of most or all of the government funding" that was provided to assist GM and Chrysler with their restructurings.
Administration officials have previous-ly said they want to maximise taxpayers'return on the investment but want to dispose of the government's ownership interests as soon as practicable.
"We are not trying to be Warren Buffett here. We are not trying to squeeze every last dollar out," Steve Rattner, who led the administration's auto task force, said before his departure in July.
"We do want to do well for the taxpayers but the most important thing is to get the government out of the car business."
Greg Martin, a spokesman for the new GM, said the company "is confident that we will repay our nation's support because we are a company with less debt, a stronger balance sheet, a winning product portfolio and the right size to match today's market realities."
The Congressional Oversight Panel was created as part of the Troubled Asset Relief Programme, or TARP.
It is designed to provide an additional layer of oversight, beyond the Special Inspector General for the TARP and regular audits by the Government Accountability Office.
The panel's report recommends that the Treasury Department consider placing its auto company holdings into an independent trust, to avoid any "conflicts of interest."
The report also recommends the department perform a legal analysis of its decision to provide TARP funds to GM and Chrysler, their financing arms and many auto parts suppliers. Some critics say the law creating TARP didn't allow for such funding.
The panel's members include Rep Jeb Hensarling, a Texas Republican, who dissented from the report. Hensarling said the auto companies should never have received funding and criticised the government for picking "winners and losers."
Other agencies have also projected large losses on the loans and investments provided to the industry. The Congressional Budget Office estimated in June that taxpayers would lose about $40 billion of the first $55 billion in aid.
Tuesday, September 8, 2009
Nissan eco-car is on track but excise tax cut needed
Nissan says it is confident it can meet Board of Investment conditions to build 100,000 small, fuel-efficient eco-cars within five years but says excise taxes levied on the cars are too high.
The Japanese carmaker is on track to become Thailand's first eco-car producer while its peers' projects look less certain.
"Our project remains 100% on track and will never be delayed ... despite the deepening [economic] crisis," said Toru Hasegawa, the president of Nissan Motors Thailand.
Nissan is expected to launch the ecocars in the Thai market next year. A company source said the car was expected to be launched before the Bangkok International Motor Show next March.
"We will officially announce all the details of the Nissan eco-cars next month," said Mr Hasegawa.
Many other automakers with BoI promotional privileges to build eco-cars have postponed their plans as they were unsure they could meet the conditions as both local and export demand have plunged. The BoI requires them to produce at least 100,000 eco-cars per year in the fifth year of operations.
These companies want authorities to relax the annual output rule.
The source said Nissan was not wor-ried about its eco-car output as its Japanese parent intends to shift small car production from Japan to Thailand in 2010 and then export them back to Japan and other countries.
Car production in Japan has been hard hit by the strong yen.
Mr Hasegawa said Nissan disagreed with changing the BoI regulation since carmakers had accepted the terms when their projects were granted privileges.
"We play by the rules and we would not be happy if there were any changes in the Boi's regulation," he said.
Nissan will invest about 5.5 billion baht to produce between 100,000 and 150,000 eco-cars in Thailand.
Mr Hasegawa also questioned why the excise tax levied on eco-cars was higher than for hybrid electric vehicles.
He said eco-cars would contribute significantly to Thailand's economy and generate many jobs because most parts are locally produced, while the cars are fuel efficient and environmentally friendly with low emissions. Hybrid electric cars, however, need imported parts for local assembly.
Excise tax is 17% for eco-cars but only 10% on petrol-electric cars.
At present, Toyota offers Camry hybrids in the Thai market while other carmakers are waiting to gauge market response to the Camry.
The Japanese carmaker is on track to become Thailand's first eco-car producer while its peers' projects look less certain.
"Our project remains 100% on track and will never be delayed ... despite the deepening [economic] crisis," said Toru Hasegawa, the president of Nissan Motors Thailand.
Nissan is expected to launch the ecocars in the Thai market next year. A company source said the car was expected to be launched before the Bangkok International Motor Show next March.
"We will officially announce all the details of the Nissan eco-cars next month," said Mr Hasegawa.
Many other automakers with BoI promotional privileges to build eco-cars have postponed their plans as they were unsure they could meet the conditions as both local and export demand have plunged. The BoI requires them to produce at least 100,000 eco-cars per year in the fifth year of operations.
These companies want authorities to relax the annual output rule.
The source said Nissan was not wor-ried about its eco-car output as its Japanese parent intends to shift small car production from Japan to Thailand in 2010 and then export them back to Japan and other countries.
Car production in Japan has been hard hit by the strong yen.
Mr Hasegawa said Nissan disagreed with changing the BoI regulation since carmakers had accepted the terms when their projects were granted privileges.
"We play by the rules and we would not be happy if there were any changes in the Boi's regulation," he said.
Nissan will invest about 5.5 billion baht to produce between 100,000 and 150,000 eco-cars in Thailand.
Mr Hasegawa also questioned why the excise tax levied on eco-cars was higher than for hybrid electric vehicles.
He said eco-cars would contribute significantly to Thailand's economy and generate many jobs because most parts are locally produced, while the cars are fuel efficient and environmentally friendly with low emissions. Hybrid electric cars, however, need imported parts for local assembly.
Excise tax is 17% for eco-cars but only 10% on petrol-electric cars.
At present, Toyota offers Camry hybrids in the Thai market while other carmakers are waiting to gauge market response to the Camry.
Monday, September 7, 2009
Advice centre launched for importers
The customs department has launched a new service to provide advice to importers about customs procedures and tariff rates.
The new "Customs Clinic" advisory programme is part of a broader policy to move the department away from merely collecting taxes towards facilitating trade, said Pradit Phataraprasit, a deputy finance minister.
The role of customs as a revenue source will decline steadily thanks to trade liberalisation under commitments made to the World Trade Organisation and Asean Free Trade Area, he said.
"With over 70% of Thailand's gross domestic product generated by foreign trade, the Customs Department can do a lot to help businesses operate more efficiently and help Thailand become a more competitive manufacturing base,as well as helping to accelerate economic recovery," he said.
More than 40 experts will man the clinic to answer questions about customs procedures. Most questions should be answered within three days, or five days for more technical queries which require consulting with other agencies.
Questions regarding tariff classifications or price calculations will be answered within 60 days.
Advice offered through the clinic may not be legally binding, however, said Customs director-general Wisudhi Srisuphan. But the department would aim to give the best advice to importers on how best to manage their tax liabilities.
"Some of the queries we expect may be quite technical, and require additional input from bodies such as the World Customs Organisation," he said."We are concerned that if advice was made binding, officials may be more reluctant (to give advice) than otherwise."
Mr Wisudhi said the clinic has already received 171 queries since its trials began in August. Most questions were related to customs formalities, tariffs, prices and banned items.
The clinic can be reached at 02667 7880-4, by email at customs_clinic@customs.go.th or at customs offices nationwide.
The new "Customs Clinic" advisory programme is part of a broader policy to move the department away from merely collecting taxes towards facilitating trade, said Pradit Phataraprasit, a deputy finance minister.
The role of customs as a revenue source will decline steadily thanks to trade liberalisation under commitments made to the World Trade Organisation and Asean Free Trade Area, he said.
"With over 70% of Thailand's gross domestic product generated by foreign trade, the Customs Department can do a lot to help businesses operate more efficiently and help Thailand become a more competitive manufacturing base,as well as helping to accelerate economic recovery," he said.
More than 40 experts will man the clinic to answer questions about customs procedures. Most questions should be answered within three days, or five days for more technical queries which require consulting with other agencies.
Questions regarding tariff classifications or price calculations will be answered within 60 days.
Advice offered through the clinic may not be legally binding, however, said Customs director-general Wisudhi Srisuphan. But the department would aim to give the best advice to importers on how best to manage their tax liabilities.
"Some of the queries we expect may be quite technical, and require additional input from bodies such as the World Customs Organisation," he said."We are concerned that if advice was made binding, officials may be more reluctant (to give advice) than otherwise."
Mr Wisudhi said the clinic has already received 171 queries since its trials began in August. Most questions were related to customs formalities, tariffs, prices and banned items.
The clinic can be reached at 02667 7880-4, by email at customs_clinic@customs.go.th or at customs offices nationwide.
Friday, September 4, 2009
Coca-Cola chairman argues for excise tax, price-control
Coca-Cola company's chief has urged Thailand to cut or waive the excise tax on carbonated drinks, with a promise to invest more in Thailand and employ more Thai workers if the issue is reviewed.
Muhtar Kent, chairman of US-based Coca-Cola, said while paying a visit to Prime Minister Abhisit Vejjajiva yesterday at Government House that a reform of excise taxes and pricing controls would pave the way for fair competition and benefit the Thai economy.
Kiat Sitthiamorn, president of the Thailand Trade Representative Office, said after the meeting: "Kent said the pricing controls and the excise taxes are major investment obstacles. The pricing controls, which require the declaration of cost and sale prices to the Commerce Ministry, is now imposed in a few countries like Laos, Cambodia, Vietnam and Egypt.
"Meanwhile, Thailand also imposes excise taxes only on carbonated drinks, not all types of beverages. This creates unfair competition. He also complains that Coca-Cola business in Thailand has failed to effectively grow despite annual investment of Bt1 billion throughout the 40-year period."
Kiat noted that Kent did not demand an abrupt tax cut or waiver, but said the government's review would ensure fair practices and fairness to manufacturers and consumers and importantly, this will support Coca-Cola's further investment in Thailand. The trade representative said he would compile information about reducing investment obstacles for submission to the prime minister.
During the meeting, Kent commended Thailand as one of the countries that survived the economic crisis well, with its stable financial sector and apparent improvement in economic figures.
Kent visited Thailand as president of the US-Asean Business Council. Abhisit is scheduled to join the council's roundtable discussion on Sept 23 in New York, aiming to restore foreign confidence in Thailand.
Muhtar Kent, chairman of US-based Coca-Cola, said while paying a visit to Prime Minister Abhisit Vejjajiva yesterday at Government House that a reform of excise taxes and pricing controls would pave the way for fair competition and benefit the Thai economy.
Kiat Sitthiamorn, president of the Thailand Trade Representative Office, said after the meeting: "Kent said the pricing controls and the excise taxes are major investment obstacles. The pricing controls, which require the declaration of cost and sale prices to the Commerce Ministry, is now imposed in a few countries like Laos, Cambodia, Vietnam and Egypt.
"Meanwhile, Thailand also imposes excise taxes only on carbonated drinks, not all types of beverages. This creates unfair competition. He also complains that Coca-Cola business in Thailand has failed to effectively grow despite annual investment of Bt1 billion throughout the 40-year period."
Kiat noted that Kent did not demand an abrupt tax cut or waiver, but said the government's review would ensure fair practices and fairness to manufacturers and consumers and importantly, this will support Coca-Cola's further investment in Thailand. The trade representative said he would compile information about reducing investment obstacles for submission to the prime minister.
During the meeting, Kent commended Thailand as one of the countries that survived the economic crisis well, with its stable financial sector and apparent improvement in economic figures.
Kent visited Thailand as president of the US-Asean Business Council. Abhisit is scheduled to join the council's roundtable discussion on Sept 23 in New York, aiming to restore foreign confidence in Thailand.
FINANCE MINISTRY MULLS TAX BREAKS
The Finance Ministry is considering waiving all or part of the 10-per-cent excise tax on spa services,to promote tourism, one of the key sectors vital for economic growth.
"I have assigned senior official to look at tax issues for the spa business," Finance Minister Korn Chatikavanij said yesterday after chairing the opening ceremony for the "Thais Travelling Thailand" fair at the Queen Sirikit National Convention Centre in Bangkok.
However, he did not say how much the excise tax should be cut.
The ministry imposes a 10-per-cent excise tax rate on spa and massage-parlour services, partly because they consume a great amount of water. Owners of these services are also subject to income tax.
A source said the ministry might eliminate the excise tax but that the cut would apply only to spas and not to massage parlours.
Previously, the ministry targeted collecting tax from massage-parlour services, as it did not want to support underground sex services. Tax was imposed on spas in order to prevent tax evasion by massage-parlour operators concealing their activities as spa services. Spa services until recently were not promoted by the government.
Legitimate spa services have become popular in recently years, due to both health consciousness among consumers and government support.
"We may make new definitions of the spas that will enjoy tax cuts, and their services may need to be certified by the Public Health Ministry," the source said.
Korn said the government had also assigned the Government Savings Bank and the Small and Medium Enterprise Development Bank to lend more in support of tourism, which had suffered heavily from political instability, global economic turmoil and the outbreak of type-A (H1N1) influenza.
Korn was optimistic, saying there were signs of tourism recovery, with Thai Airways International, the national flag carrier, reporting more ticket bookings. He conceded that foreign tourists are still concerned about political rallies in the country.
"Tour agents are asked by tourists whether there will be airport blockages or street violence," said Korn.
Korn said one way to promote tourism is to campaign for in-country travelling among Thai customers.
About 800 counters of tour agents, hotel, airlines, spa and car rentals are participating in the fair, which runs until Sunday. Exhibitors estimate the fair will generate Bt400 million in sales of tour packages.
"I have assigned senior official to look at tax issues for the spa business," Finance Minister Korn Chatikavanij said yesterday after chairing the opening ceremony for the "Thais Travelling Thailand" fair at the Queen Sirikit National Convention Centre in Bangkok.
However, he did not say how much the excise tax should be cut.
The ministry imposes a 10-per-cent excise tax rate on spa and massage-parlour services, partly because they consume a great amount of water. Owners of these services are also subject to income tax.
A source said the ministry might eliminate the excise tax but that the cut would apply only to spas and not to massage parlours.
Previously, the ministry targeted collecting tax from massage-parlour services, as it did not want to support underground sex services. Tax was imposed on spas in order to prevent tax evasion by massage-parlour operators concealing their activities as spa services. Spa services until recently were not promoted by the government.
Legitimate spa services have become popular in recently years, due to both health consciousness among consumers and government support.
"We may make new definitions of the spas that will enjoy tax cuts, and their services may need to be certified by the Public Health Ministry," the source said.
Korn said the government had also assigned the Government Savings Bank and the Small and Medium Enterprise Development Bank to lend more in support of tourism, which had suffered heavily from political instability, global economic turmoil and the outbreak of type-A (H1N1) influenza.
Korn was optimistic, saying there were signs of tourism recovery, with Thai Airways International, the national flag carrier, reporting more ticket bookings. He conceded that foreign tourists are still concerned about political rallies in the country.
"Tour agents are asked by tourists whether there will be airport blockages or street violence," said Korn.
Korn said one way to promote tourism is to campaign for in-country travelling among Thai customers.
About 800 counters of tour agents, hotel, airlines, spa and car rentals are participating in the fair, which runs until Sunday. Exhibitors estimate the fair will generate Bt400 million in sales of tour packages.
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