Companies set to meet tougher tax collector

Bangkok Post (21 November 2007)

Stricter audits and enforcement next yearPrivate companies should prepare for tougher tax collection by the Revenue Department, say tax experts. Thavorn Rujivanarom, lead partner of PricewaterhouseCoopers Legal & Tax Consultants, said the Revenue Department would press on to collect taxes from private companies this year after tax receipts last year were below officials' projections.

This year, the department hopes to collect 1.208 trillion baht in taxes from all sources. Last year, the total tax collected was 1.119 trillion baht, below its target of 1.14 trillion.

''The Revenue Department has been imposing a tougher tax collection policy, especially on companies. ... Tax officers will use every means they have, from an operation visit to auditing and a change of tax law to favour the state,'' he said.

Tax audits would be more aggressive and companies would have to appeal cases related to tax payments.

In cases requiring interpretation of the tax law, Somboon Weerawutiwong, a PWC partner, said the rulings would favour the government rather than private companies.

''Tax officers are very careful and strict. They were accused of favouring big companies and costing the state a lot of money in the past, especially in the controversial case of share sales by Shin Corp to Temasek and the Ample Rich share transfer case,'' he said.

Both legal experts suggested that companies prepare sufficient documents for tax officers when they conduct an audit.

Mr Thavorn noted that the Revenue Department has changed its policy related to tax collection on projects that have been awarded tax privileges by the Board of Investment.

In the past, each company was able to report losses on a project-by-project basis and carry accumulated losses as a tax shield for five years.

But the new policy states that if a company has many BoI-approved projects, it must offset profits and losses among all projects first before reporting total profits.

The new ruling has increased the tax bill for many companies and some who disagreed with this method have appealed to the Finance Ministry's special committee related to laws and legislation, he said.

Mr Thavorn said the Revenue Department was closely monitoring the automobile, banking and finance industries. It is trying to link its information database with the other agencies such as the Port Authority of Thailand and the Commerce Ministry to cross check whether companies pay taxes.

''Some rulings and law interpretations in the past can be changed now. This has caused many companies a lot of confusion,'' he said.

Mr Thavorn said the Revenue Department should change its mindset, and help companies expand, which in turn would help boost tax revenues.

Work practices and legal interpretations used by different tax officers and offices throughout the country should also be made uniform, he added.

Mr Thavorn said Thailand should have a clear tax policy to attract foreign investors. This would also help increase competitiveness of companies.

Thailand's 30% corporate income tax is higher than other countries in Asia. Vietnam charges 28%, Malaysia 27%, Singapore 20% and Hong Kong 17.5%.

''I think foreign investors can stay with tougher laws and regulations but the rules must be clear so that they will can forecast risk and return,'' Mr Thavorn said.

''Enforcement must be consistent as well as foreign investors don't want to deal with uncertainty.''

Salary increases projected at 7%

Bangkok Post (21 November 2007)

Local employees are likely to see an average salary increase of 7% this year, up slightly from 6.9% last year.

According to a survey by The Hay Group, the stronger baht has negatively affected manufacturing but has been positive for the oil and gas sector. Manufacturing workers can hope for an average raise of 5.6% while those in the energy sector can look forward to 8.5%.

Hay surveyed 117 companies responsible for almost 100,000 jobs across Thailand. It covered nine industries including energy, chemicals, retail, finance and banking, fast-moving consumer goods, professional services and more.

Boonlerd Viboonkiat, Hay's country manager, said nearly 70% of the respondents were foreign-owned companies while the remaining 30% were local ones.

The survey revealed that blue-collar workers can expect to see their salaries rise by 6.7% and middle and senior management by 7%. Employees in consumer products can hope for 7.4%, retail business 6.4% and chemicals 6%.

Overall, employees are likely to receive a bonus of 2.6 months' salary, which is lower than last year's 2.8 months and 3.3 months in 2005.

Employee turnover has also climbed this year to 9.3%, compared to 7.9% in 2006. The retail sector holds the highest employee turnover rate of 16.6%.

The average starting salary of new graduates ranges from 14,268 baht in banking to 19,173 baht in engineering.

TOT requests collaboration

The Nation (21 November 2007)

In a U-turn, TOT has asked to collaborate with private telecom operators, to solve the conflicts they have had with the state agency and become its partners in a plan to become a "national network provider".

The state agency yesterday called an urgent meeting with four major telecom operators - Advanced Info Service (AIS), Total Access Communication (DTAC), True, and TT&T - to inform them what is on its mind.

TOT has had disputes with True due to their competition in the same field, as well as with DTAC and True Move over access charges. Last week, it filed civil suits against DTAC and True Move, demanding a combined Bt14 billion in overdue access charges.

TOT chairman Saprang Kalayanamitr said all parties should join in a bid to solve the conflicts with the state agency.

"Whatever problems we can clear up among us, we should do so right now," he said.

But he denied TOT had considered withdrawing the civil suit against DTAC and True Move.

TOT also asked the four telecom operators to be partners in its plan to become a national network provider. It has set up a committee chaired by board director ML Anuporn Kashemsant to work out further details and the business model of the project with the telecom operators.

Their first meeting on the matter is scheduled for November 29. The committee will also ask CAT Telecom to join the project. TOT also plans to ask the four telecom operators to sign a project partnership deal with TOT in the future.

True CEO Supachai Chearavanont said his company was willing to support the project, which would benefit the country, but that more details of the project needed to be worked out.