The government's chances of taxing former prime minister Thaksin Shinawatra over his sale of the family's stake in Shin Corp are slim, according to a Revenue Department source.
The source said the department has decided to exercise Sections 820 and 821 of the Civil Code to levy Thaksin over the deal.
On Feb 26, 2010, the Supreme Court ordered the seizure of Thaksin's assets on its ruling that his children -- Mr Panthongtae and Ms Pinthongta -- were mere proxies holding the shares for him.
In December that year, the Central Tax Court ordered the withdrawal of the tax appraisals of the siblings who sold the shares and gained nearly 16 billion baht, citing the Supreme Court's ruling that the siblings were Thaksin's proxies.
According to the source, in a letter sent in 2007, the department demanded Mr Panthongtae and Ms Pinthongta pay the tax based on the Civil Code, in effect asking Thaksin to pay.
However, the source expressed doubts Thaksin would be liable to pay the tax, saying the Revenue Code may actually prove a barrier to proceedings in this case.
He said according to Section 61 of the Revenue Code, officials are only allowed to assess taxes from people whose names appear in important documents showing they are owners of properties which generate assessable income.
The official names mentioned in the documents of this case are Mr Panthongtae and Ms Pinthongta.
The deal concerns Thaksin's adult children, Mr Panthongtae and Ms Pinthongta, who bought 329 million Shin Corp shares at a price of one baht each from Ample Rich, an offshore holding company controlled by the Shinawatra family.
The pair later sold the shares in their name to Temasek through the Stock Exchange of Thailand for 49.25 baht each, reaping a capital gain of nearly 16 billion baht.
The government has ordered the department to expedite efforts to collect an estimated 16 billion baht in tax and fines from the former premier over the deal before the statute of limitations of the case expires by March 31.
The department on Monday sent a letter to Thaksin for the tax assessment, the start of a new 10-year statute of limitation.
Pheu Thai Party lawyer Ruangkrai Leekitwattana submitted a letter on Monday to the Revenue Department warning that it could end up violating the National Anti-Corruption Commission's (NACC) law on abuse of power if they collect the tax from Thaksin over the matter.
Mr Ruangkrai said the sale of shares on the stock market is not subject to tax, and that should be the end of it.