Tax evasion : Thaksin’s wife is guilty, and convicted… 3 years jail

The Criminal Court hands down a guilty verdict on the tax evasion case involving Khunyin Pojaman Shinawatra and two fellow defendants.

The court sentences Pojaman and her brother Bhanapot Damapong to serve three years in jail. Two years for the charges relating to the conspiracy to evade tax. One year for giving falsified statements.

At last ! At last a clear-cut, real justice decision against Thaksin’s clan.

Can you imagine… 11 years after the facts… (read here for details about the case).

I believe it’s impossible to say that this case was politically motivated… What was politically motivated were the 11 years to wait for… This case is not like the dissolution of TRT party.

This tax evasion case is totally different.

In this case, we had an important woman with her brother who just showed an amazing greed enhanced by an astonishing sense of impunity and contempt for rules.

It’s without any doubt a victory for the thai justice system.

But of course, the legal process continues.

They have the right to appeal within 30 days from now.

They are released on a five-million-baht bail per person. (Bangkok Post)

Inflation chronicles : +29 % for milk, +12,5 % for tollways

While the gvt entertain the (rich) thais and businesses with a tax cut on diesel and gasohol… for 6 months… the inflation tsunami continues, silently, to build up.

+29 % for raw milk

The Cabinet has given the green light for an increase of 4 baht in raw milk products in response to the request by dairy farmers nationwide.

Agriculture and Cooperatives Minister Somsak Prissananantakul reveals that the Cabinet has approved a price increase for unpasteurized milk products, previously sold at 14 baht per a kilogram, to 18 baht per a kilogram.

Earlier, a group of about 1,000 dairy farmers from provinces nationwide staged a protest that closed Pitsanulok Road in front of the Government House. They asked for a price increase in raw milk products. Somsak says the price increase for raw milk products could possibly lead to an increase in the price of milk cartons, of 2 baht per carton. (TOC)

+12,5 % for tollways

The Expressway and Rapid Transit Authority of Thailand’s board of directors on Thursday resolved to raise the tollway rate by Bt5-15.

Effective on September 1, the rates for 4-wheel vehicles would be Bt45 from Bt40, for 6-10-wheel to Bt79 from Bt60, and for vehicles with over 10 wheels to Bt100 from Bt85. (Nation)

But actually, it could be more… The government is thinking to add the… VAT (7 %). Yes ladies and gentlemen, tollways in Thailand are currently VAT free. Why ? Because. 😉

Reminder
In august, we have prices increases in the pipe for : taxis and (a hot issue)… LPG (look the fuel consumption chart here to understand the issue).

Soft drinks should follow. And possibly, soy bean oil (read here, the pressure is mounting with fears of shortage).

11 years after… verdict thursday in Thaksin’s wife tax evasion case

Tomorrow thursday is a big day.

The Criminal Court is scheduled Thursday to hand down the verdict on the tax evasion case involving Khunying Pojaman Shinawatra, wife of former prime minister Thaksin.

Pojaman’s fellow defendants include her brother Bhanapot Damapong. The litigation centres on the transfer of Shin shares between the two which was declared as family gift in order to evade tax liabilities. (Nation)

But… we have to remember that the transaction happened in… 1997 ! Yes ladies and gentlemen…

Pojaman [Thaksin’s wife] transferred her Shin Corp shares held by her nominee Duangta Wongpakdi [who was the maid !!!] [in another article, Nation talks about “her private secretary Kanchanapa Honghern”] to Bhanapot [her brother and former president of Shin Corp] on November 7, 1997.

The shares were worth Bt738 million and Bhanapot failed to meet his tax liability amounting to Bt270 million.

The transaction came to the attention of the authorities in 2000, after the National Counter Corruption Commission (NCCC) uncovered evidence in connection with its investigation on assets declared by Thaksin upon assuming office.

The NCCC report prompted the Revenue Department to open a tax probe on pojaman and Bhanapot in 2001.

The probe, supervised by Sirote, focused on taking one-sided statements from the two without verifying the information nor examining circumstances and evidence surrounding the transaction.

Sirote’s hasty ruling to classify the transaction as a “family gift” and grant tax exemption for Bhanapot has deprived the state of revenue. (Nation)

And here is another version : “In November 1997, Pojaman transferred 4.5 million shares of Shinawatra Computer and Communication, worth Bt738 million, to Bhanapot through the account of her maid Duangta Wongpakdi. She presented the transfer as a share sale in the stock market, which is tax-exempt. This was a deliberate deception, the lawsuit claims.

In 2001, Bhanapot and Pojaman told officers of the Revenue Department the share transfer was not subjected to tax as it was “a gift” from Pojaman to Bhanapot. ” (Nation)

Nice huh ? ! You order a third party (your maid !) to give me 21 millions USD… and it’s tax free because I say -politely- to the Revenue Department “it’s a family gift“.

And the Revenue Departement says -politely- “but of course Khun ThaiCrisis. If you say so. Our pleasure“.

😉

Bona fide gifts might be non taxable income. But in this case, apparently, Pojaman didn’t give “her” shares to her brother… But ask a third party (who was holding “her” shares) to give the shares to her brother…

Timeline : 1997, 2000, 2001, october 2007 (start of trial), july 2008 verdict.

The whole story is highly tasty. And it’s echoes… directly the asset concealment case against Thaksin himself (in 2001)… He was acquitted (judges voted 8 to 7), after his landslide victory at general elections.

So we can see that someway it’s a… tradition for the Thaksin’s family members to use… maid or secretary as nominees to hold shares (valued at dozen of millions USD) for them…

What a strange family. And what a strange country.

Anyway see you tomorrow… It’s going to be tasty.

Chart : retail prices of diesel and other fuels until july, and impact of the subsidy policy

Here is an update of my chart about the retail prices of fuels (from PTT, and for Bangkok, THB per liter).

Source PTT.

It was important to show july 25, when we had the tax cuts decided by the government (on diesel and gasohol, -2,30 THB per liter of diesel for instance).

This chart allows us to… calm down our enthusiasm. Why ?

-as you can see, for diesel and gasoline 91 (regular) we are back… to may 2008 levels. Great. If we compare with january 2006 levels, the increases of prices remain massive.

-then, we have to repeat that the 3 main fuels used for vehicles in Thailand are diesel and regular gasoline and LPG. Look at this chart (datas of may, source EPPO) (NGV is missing, but its volume remain small, eventhough it increases rapidly, “Currently, the number of NGV-installed vehicles in the country totals 93,000 units. The number of vehicles seeking NGV installation increases to 400 units per day from less than 100 units in 2006” source TNA).

-prices of LPG (for vehicles) will increase in… august.

-only a small number of people (with new cars) will enjoy the tax cuts on gasohol (91 and 95) and E20 (mixing of gasoline + 20 % of ethanol).

-distribution of E20 remains… virtual upcountry.

-and overall, we have to repeat that those tax cuts are for… 6 months.

So again, don’t believe that the “tax cuts party” since last week is going to change fundamentally the situation… from an economic point of view. The subsidy policy is just a quick fix of “feel good” dope.

The only thing that could change really the situation is a massive decrease of oil prices on the world market. Currently we are at 125 USD per barrel.

GDP and inflation : BOT revises down and up its forecasts

It’s good to be good ! 😉

I was right on GDP. And right on inflation.

-The Bank of Thailand (BOT) forecasted headline inflation would reach an 11-year high at 7.5-8.8 per cent, while core inflation would break the policy target to 2.8-3.8 per cent this year marking the first time since inflation targeting was introduced in 2000.

-The Kingdom’s economic growth forecast, however, was revised slightly lower to 4.8-5.8 per cent from 4.8-6 per cent. (Nation)

The last inflation revision was end of april… When the BOT increased its forecast from a surreal 4 % to 5 % for the whole year.

High inflation has apparently eroded consumption and investment while exports could grow higher than expected, thanks to global demand.

No it’s not “apparently” it’s “obvious“… Inflation (at least, the form we currently experience) leads to declining purchasing power.

The BOT estimated total consumption to grow 3-4 per cent this year, compared with a previous forecast of 4.5-5.5.

Total investment is projected to expand 4.3 – 5.3 per cent, lower than 8.5-9.5 per cent in earlier projection.

Still those projections could be lowered again. I mean it’s a sign that the total investment projection has been divided by 2 ! The previous ones were delirious, designed for a rozy world full of confidence, mega-projects, and small kids laughing in Wonderland etc.

The reality for businesses is totally different : uncertainty (on the political front and the economy as well), higher interest rates, running inflation/costs, high competition (difficult sometimes to increase prices, or even forbidden due to gvt prices controls policy), and bad perspectives for exports (obvious slowdown in US and UE, again the BOT is dreaming when talking about a continuous higher global demand !), etc.

Press : “Asian Nixonomics may spell subsidy-driven stagflation”

A very good article about the current policies, and their risks, shared by most Asian countries.

Thailand follows with diligence the text book : postpone the pain, increase the subsidies on very short term, etc… It’s Wonderland. And soon after, it will be Horrorland.

July 28 (Bloomberg) — Asian governments from India to Malaysia, clinging to budget-busting fuel subsidies, may end up paying an even higher price: saddling their economies with an extended period of stagflation.

“Subsidies will come increasingly in the way of future growth,” says Kalpana Kochhar, a senior adviser for the International Monetary Fund’s Asia-Pacific Department in Washington. “Not passing prices through and keeping artificial price and wage controls never works.”

Governments are being forced to choose between two unattractive alternatives: run up bigger deficits by continuing to shield citizens from soaring energy prices, or start to withdraw subsidies, fueling inflation and political backlash. Inflation has already reached decade highs throughout the continent and played a role in destabilizing politics.

Exclusive (joke) : Obama is General Prem’s reincarnation

First, have a look at the latest hilarious pastiche from NotTheNation, about Obama.

Some quotes :

Obama calls on Berlin to “together hope new free hope united”

Obama delivered a stirring call for greater cooperation between the United States and Europe in facing what he called “challenges tomorrow stand up can face.”

In a clear repudiation of words without uplifting value, Obama said, “Ideals aspirations free, dream humanity one.”

“Tear down walls, we are all Berliners, we are all one, united wall of hope,” Obama said, echoing memorable lines from historic speeches delivered in this city by presidents John F. Kennedy and Ronald Reagan.

“One nation one world love me one people.”

“Christian Muslim Jew everyone together party pin tail donkey my place 5pm,”

[ NotTheNation, you’re the man ! ]

Then consider this -real and overwhelming- statement from General Prem, member of the Privy Council.

“Definitely, I don’t want to see the society divided,” Prem when reporters asked if he worried about social divisiveness.

But he believed that when the situation warranted, all Thais would be united.

“I believe when it’s time, all Thais will come together,” Prem said. (Nation)

We could find a serious teaching to this joke : when politicians don’t know exactly what to say, they stick to some keywords and obvious marketing concepts : future/past, forward/backward, unity is better than divisiveness, full is better than empty, etc. 😉

To be fair, we should note that this rozy rethoric is a real national sport here in Thailand, and not an exclusivity of… General Prem.

Another blow to the gvt : Supreme Court accepts lottery case for trial

The Supreme Court’s Criminal Tribunal for Political Office Holders decided Monday to proceed with the trial in the lottery case against former members of the Thaksin Cabinet.

The court scheduled the first hearing on September 26.

The court’s decision will cause three members of the Samak Cabinet, including Deputy Prime Minister and Finance Minister Surapong Suebwonglee, to be suspended from duty. (Nation)

[if you wan’t to learn more about this famous “lottery case”, read here]

And another blow to Samak’s government !

Although, it’s not very clear if the suspension of duty would be automatic.

The three ministers linked to the two-and three-digit lottery scandal will today ask the Council of State, the government’s legal adviser, if they have to step down from the cabinet now the Supreme Court has accepted the case. They also plan to seek an interpretation from the Constitution Court on whether they should be suspended from duty.

Until further recommendations are made, the ministers have insisted they will continue with their work. (Bangkok Post)

And meanwhile…

The anti-graft law is clear that the three Cabinet members involved in the lottery case are obliged to suspend their job, National Counter Corruption Commission member Wicha Mahakhun said on Tuesday.

“The political confusion persists because many politiicians do not abide by the judicial opinions. To end this, it is imperative to uphold the judiciary power,” Wicha said. (Nation)

Confusion indeed… Do you understand now the core of the problem ? The country is like a headless chicken running amok inside a train, launched at full speed on twisted tracks… 😉

How can we expect seriously this government to handle properly the current economic situation ?

Dare to do it ? They think to cut VAT rate from 7 to 3 %

I have to say that the brains behind the government’s desks don’t take rest… Here is their last -bright- idea in order to fight inflation… Cut the VAT rate… For 3 to 6 months 😉 !

The Commerce Ministry will propose cutting value-added tax (VAT) on consumer products from 7 per cent to 3 per cent for three to six months to help people cope with the cost of living, Internal Trade Department director-general Yanyong Phuangrach said yesterday.

The proposal will be submitted to the Finance Ministry for consideration.

It is aimed at easing the burden on consumers from rising oil prices and inflation, which reached 8.9 per cent last month.

“The proposed temporary VAT cut would help consumers directly, immediately bringing down the price of goods,” said Mr Yanyong.

Food and beverages would be the consumer segment most affected. (Bangkok Post)

The authorities start to understand that to lower tax on gasoline won’t deter businesses to increase their prices. So the only way to get automatic and immediate cuts of prices would be indeed to reduce the VAT rate.

In average the VAT yields 39 billions THB per month… For all products and services.

We don’t know what is the total for only consumer products. Therefore, we can’t calculate the cost of such idea.

But anyway, once again, this idea is idiotic. 3 against 7 % would it be enough ? And what about the time frame… 3 months ? !

My -rational- bet : they won’t do it. They can’t. Too costly. And it would be a psychological disaster when after 3 or 6 months… suddendly the VAT rate would go up again.

But we need to remember that the times are not rational at all… Wonderland, White Rabbit Hole, Zimbabwe… actually they… could do it. 😉

UPDATE
Well, the reaction was fast.

Deputy Prime Minister and Finance Minister Surapong Suebwonglee insisted on Monday that the Commerce Ministry’s proposed cut in value-added tax from 7 per cent to 3 per cent is impossible in the current economic conditions.

He noted that the government has enforced several tax measures to stimulate the economy, and if VAT is reduced, it would deplete the government’s revenue.

“VAT is a major source of revenue. For two years, we have delayed the increase in VAT to 10 per cent and instead focused on boosting the economy through higher tax deduction allowances, higher depreciation costs, and a cut in special business tax for the property sector. Inclusive of the six recently-endorsed measures, we have lost a large amount of revenue and there is no need to enact a tax measure to control product prices.

But… Surapong is likely to loose his job (read here). The new Finance Minister could have other ideas. 😉

Tourism : “number of long haul visitors has declined by 10 %”

Tourism-related operators must focus on short-haul tourists to offset a falling number of long-haul tourists, who have been hurt by soaring travel costs. Prakit Chinamourphong, president of Thai Hotels Association (THA), said the number of long-haul tourists, particularly from Europe, has declined by 10% since the start of the year as higher oil prices have increased travel costs by over 30% from last year.

The number of chartered flights is decreasing significantly due to rising fuel surcharges. However, the number of short-haul tourists is growing. (Bangkok Post)

It’s very unfortunate that TAT (Tourism Authority of Thailand) has stopped the publication of the statistics of international arrivals (by country and port of entry)… Last datas are for… december 2007.

Before, it was easy to follow the situation, with only 2 months time lag, and creating nice charts…

Now we have to rely on bad reports from the thai press, and selected datas…

What do they want to hide ? Is there something to hide ? 😉

Give us back our stats ! 😉

Thaisoviet : Commerce Ministry mulls controlling profit margins

My readers probably know that I like to use 2 -affectionate- nicknames for Thailand. “Wonderland” for political and social issues. And “Zimbabwe” regarding most of the economic policies of the government.

Sometimes I use “White Rabbit hole” too, but only when I’m in a very good mood.

Well, I just found a new one : Thaisoviet. 😉

Consider this piece from Nation :

The profit margins of consumer-goods manufacturers could be controlled if the Commerce Ministry gets its way as part of its plan to curb inflation and relieve consumers’ cost burden.

The move followed requests by several companies’ to raise prices. Internal Trade Department director-general Yangyong Phuangrach said the ministry was studying three scenarios for controlling goods prices.

“Under the worst-case scenario, we would limit not only the price ceiling of essential products, but also profit margins, in order to ensure fair practice for consumers,” he said.

Previously, the ministry calculated the price ceiling of essential goods but decided to leave profit margins intact.

Surely, we could say that the bureaucrats “working” on such scenarios have no clue, whatsoever, of the “meaning of life” as the Monthy Python used to say…

And that they are probably a bunch of bored and boring marxists, with Zimbabwean bias. Fair enough.

However, still, it says a lot about the current “state of mind” of the authorities…

And i would like to add that actually the difference between controling prices by “controling costs” or “controling margins”… is tiny ! Eventually, it’s exactly the same -twisted- logic.

It’s just as inane, counterproductive and idiotic.

A small example :

-your factory manufactures toy in plastic and you sell them 100 THB a piece. The cost of plastic per toy is 70 THB. All the other costs, per toy, represent 10 THB, leaving you with a huge profit (you dirty capitalist sucking our blood) of 20 THB a piece.
Life is good.

-now the cost of plastic per piece suddenly increases by 15 %… 10 THB more… total 80 THB … meaning your profit is divided by 2 (10 THB only).
Life becomes miserable. You have to increase your selling price at 110 THB.

-bureaucrat number 1 tells you : “Khun Manager, you suffer from hallucinations, your total cost is not 80 THB but still 70, okay khrap. So you don’t have to increase your price… therefore you’ll continue to sell your toy 100 THB”.

-bureaucrat number 2, a little bit red faced probably because of the ingestion of Thai Whisky, arrives and tells you : “Khun Manager… I see that your profit is 20 THB, and that if you want to keep it, you have to increase the price of your toys at 110 THB because plastic costs went up. But it’s really not sanook, and it wouldn’t be popular… Therefore, I order you to lower your profit at 10 THB… Of course, that will lead you to keep your price unchanged… it’s magic, it’s exactly what we wanted you to do”.

In both case, your profit is divided by 2. And in both case, you feel miserable. 😉

It’s an example of the delicious thai rethoric that bureaucrats love to use.