Customs department: Deep-rooted corruption

Customs department: Deep-rooted corruption

For weeks, the DSI and police have been trying to track down super-luxury cars like this Rolls-Royce, imported with questionable paperwork - including some apparently stolen off British streets and shipped to Thailand. (Photo courtesy DSI)
For weeks, the DSI and police have been trying to track down super-luxury cars like this Rolls-Royce, imported with questionable paperwork - including some apparently stolen off British streets and shipped to Thailand. (Photo courtesy DSI)

Deep-rooted big money corruption by customs officials & influential figures revealed in supercar tax evasion saga.

CORRUPTION & THE CUSTOMS DEPARTMENT

Customs department: Deep-rooted corruption

8/06/2017
Wichit Chantanusornsiri

The ongoing supercar tax evasion saga reflects the flaws in the country's tax system and deep-rooted corruption in state mechanisms.

THE SUPERCAR TAX EVASION SAGA: RICH PEOPLE WHO DO NOT PAY TAXES

As reported in the media, car tax evasion is rampant.

At least 166 luxury cars were found to be imported without proper tax and the state is believed to have lost about three billion baht in tax revenue.

MISCONDUCT OF CUSTOMS OFFICIALS

Currently, nine customs officials face a probe over their alleged misconduct in connection with the illegitimate return of nearly 20 million baht in taxes to two companies.

They were among several companies raided by the DSI last month, with the seizure of about 60 luxury cars.

HOW DID IT ALL BEGIN?

The case began with suspicions by tax evaluation officials who found the prices of two supercars as declared by the two importer firms to be unusually low, and asked the companies to provide the original invoices.

The two companies were subsequently ordered to pay deposits covering what the taxes were believed to be in case they could not provide proof to the contrary.

As the companies missed a seven-day deadline to confirm the previously declared prices, the department confiscated the deposits.

Later on the two firms appealed, and managed to have their money returned after approval by the two high-ranking officials who were deputy director-generals of the Customs Department.

Strangely, these high-ranking officials acted on their own and gave the money back without following the normal procedure.

An initial investigation found the two deputy director-generals bypassed the authority of the committee tasked with considering the appeals filed by the companies.

TAX EVASION BY INFLUENTIAL FIGURES

As we all know, only a few rich people can afford supercars. For that reason, tax dodging on an item of high value can only be achieved with the influence of those involved.

Many luxury cars have been seized in several raids over the past decades. Of course, the fact that so many people are involved in supercar tax evasion means the benefits from the fraud must be so huge that it tempts people to take the risk, robbing the state of billions of baht of revenue.

But the fact is: Tax dodgers could never make it without the help of state officials, in particular those at the Customs Department and other state agencies.

FALSELY DECLARING LOW CAR PRICES TO EVADE TAXES

The supercar tax is extraordinarily high, totalling 328% of the price of each imported car with an engine size exceeding 3,000cc. It's a combination of several kinds of duties and taxes including import tax, excise tax, VAT tax and another tax collected by the Interior Ministry.

[Details on the taxes: The import tax is 80% of CIF (cost, insurance and freight) value, and excise tax that is based on the size of a car's engine. In the case of a car with an engine size over 3,000cc, it is subject to a 50% tax rate based on the CIF price plus import tax. There is also another tax collected by the Interior Ministry, and 7% VAT. Cars with lower engine sizes are subject to a lower tax rate.]

This explains why some companies intentionally declare lower car prices when registering vehicles with the state.

ONE TRICK: IMPORT ALL THE PARTS, ASSEMBLE IN THAILAND

Apart from falsely declaring car prices, some tax dodgers choose to import car parts, marking them as "used parts" to be assembled in the country.

In doing so, a car of this type which is categorised as a second-hand vehicle is subject to only 30% import tax.

But it is known that the companies are actually importing brand new fully assembled cars.

The vehicle is taken apart only for import registration and to benefit from huge tax savings.

A total of 7,123 cars are being probed by the DSI to see if they belong in this fraudulent category.

POLICE COOPERATION NEEDED TO ACT AGAINST INFLUENTIAL FIGURES

More importantly, a source in the Customs Department said customs needs cooperation from police in raids against supercar tax evasion.

This is because those involved are influential figures, otherwise it would not be possible to act against them or make a raid.

DEATH THREATS AGAINST OFFICIALS TO MAKE THEM COOPERATE OR GO AWAY 

It is known that some customs officials who levied taxes on imported supercars faced death threats that prompted them to ask for transfers.

TAX FRAUD LIKELY BEGAN AT THE CUSTOMS DEPARTMENT

But it's clear that such tax fraud must begin at the Customs Department with a helping hand from some other agencies. Besides, I find unconvincing the claim by customs officials that they have no knowledge of real CIF prices of an imported car and have to accept the sum that appears on invoices.

Such a claim only shows, at best, the incompetence of customs officials. At worst, it's likely the officials intentionally turn a blind eye to the fraud, reaping gains from tax-dodging gangsters.

TRICKS POLITICIANS & BUSINESS LEADERS USE TO EVADE TAXES

Take a recent high-profile case involving luxury passenger vans.

Such vans are popular among politicians and business leaders.

Importers used an easy trick to have the vehicles classified as cargo vans, which are subject to lower taxes, by installing a removable extra seat.

With the extra seat, importers were able to claim their vans were cargo carriers and avoided hundreds of thousands of baht in tax.

As you can see, fraud is facilitated with such easy tricks.

This is why it's very difficult to wipe out tax-dodging attempts while luxury cars are in high demand.

http://www.bangkokpost.com/opinion/opinion/1264651/supercar-tax-dodging-game-far-too-easy

https://www.facebook.com/customsdepartment.thai/

http://en.customs.go.th/

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Vocabulary

  • achieve: to succeed in doing something very good or difficult - บรรลุผลสำเร็จ
  • actually: used for stressing what is really true or what really happened - ตามความเป็นจริง
  • agency (noun): a government department that provides a particular service - หน่วยงานราชการ
  • alleged: claimed to be true although not yet proven; claimed to have done something wrong but not yet proven - ที่ถูกกล่าวหา
  • apart from (prep): except for - นอกเหนือจาก
  • appeal (noun): a request that a decision be changed - การอุทธรณ์
  • appeal: an urgent request for people to do something or behave in a particular way - การร้องขอ
  • approval: official permission - การอนุมัต
  • assemble: to make something by joining separate parts - ประกอบ
  • at least: the smallest amount possible, could be more than this - อย่างน้อย
  • benefit: to get help or an advantage from something - ผลประโยชน์
  • brand new: extremely new; the latest version of something that has just been introduced - ใหม่ล่าสุด
  • bypass: to avoid dealing with someone or something - หลีกเลี่ยง
  • case: a matter that is being officially investigated or heard by a court - คดี
  • categorise: to put people or things into groups with the same features - จัดกลุ่ม, จัดประเภท
  • combination (noun): the mixture you get when two or more things are combined - การรวมกัน
  • committee: a group of people who are chosen, usually by a larger group, to make decisions or to deal with a particular subject - คณะกรรมการ
  • confirm (verb): to state or show that something is definitely true or correct, especially by providing evidence - ยืนยัน
  • confiscated: officially taken away as a punishment - ยึดทรัพย์
  • consider: to give careful thought to something before making a decision - พิจารณา
  • cost: an amount of money that people need to pay for something - ค่า
  • cover: include -
  • currently: at this time; now - ในปัจจุบัน
  • customs (noun): the checking and collecting of taxes on goods leaving or entering the country, carried out by the customs department - งานที่เกี่ยวข้องกับภาษีศุลกากร
  • Customs Department: a government department which checks and collects taxes on goods leaving or entering the country - กรมศุลกากร
  • deadline: a time or day by which something must be done - เส้นตาย
  • decades: periods of ten years - เป็นสิบๆปี
  • declare: to state something firmly and clearly - ยืนยัน
  • declare: to tell customs officers (= at the border of a country) the kind of goods you are carrying - แจ้ง, เปิดเผย
  • declare: to tell the tax authorities or other government agency how much money or other assets you have or have have earned - แจ้ง, เปิดเผย
  • deep-rooted (adj): (of feelings and beliefs) very fixed and strong; difficult to change or to destroy - แน่นแฟ้น,ฝังจิต ฝังลึก
  • deposit: a sum of money which is given in advance as part of a total payment for something - เงินมัดจำ
  • deputy: a person whose rank is immediately below that of the leader of an organisation - รอง
  • director-general: the head of a large organisation, especially a public organisation - อธิบดี
  • dodge: to avoid something unpleasant - หลบหลีก
  • duty: a tax -
  • evaluation: the process of thinking carefully about something before making a judgment about its value, importance, or quality - การประเมินผล
  • exceed: to be more than something; to go beyond a limit - เกินกว่าที่กำหนด
  • excise tax: a tax made by a government on some types of goods made, used sold within their own country - ภาษีสรรพสามิต, ภาษีสำหรับสินค้าในประเทศ
  • extraordinarily (adv): in a way that is unexpected, surprising or strange - อย่างเป็นพิเศษ, อย่างผิดธรรมดา
  • file: to take official action like making a complaint - ยื่น, ยื่นคำร้อง
  • firm: a business or company - บริษัท
  • flaw: a fault; something wrong with something - ข้อบกพร่อง
  • fraudulent: made with the intention of tricking someone, especially illegally - การฉ้อโกง
  • freight: goods, but not passengers, that are carried from one place to another, by ship, aircraft, train or truck, or the system of transporting these goods - สินค้าที่ขนส่ง
  • high-ranking: senior; important - ที่มียศสูง, ที่อยู่ชั้นสูง
  • huge: very large - ใหญ่โต
  • illegitimate: not allowed by the rules or laws - ที่ขัดต่อกฎหมาย
  • import: to buy or bring in products from another country - นำเข้า
  • importer: a person, company, or country that brings goods into their country in order to sell them - ผู้นำเข้า
  • in connection with: relating to something - ที่เกี่ยวข้องกับ
  • in particular: especially or particularly - โดยเฉพาะ, โดยเฉพาะอย่างยิ่ง
  • influence: the power to have an effect on people or things - อิทธิพล
  • influential figures (noun): people who have the power to affect a situation, especially in a bad way - ผู้มีอิทธิพล
  • initial: early; first - เบื้องต้น
  • insurance: an arrangement in which you regularly pay an insurance company an amount of money so that they will give you money if something you own is damaged, lost, or stolen, or if you die or are ill or injured - การประกัน
  • intentionally: deliberately; done purposely - อย่างตั้งใจ
  • investigation: the process of trying to find out all the details or facts about something in order to discover who or what caused it or how it happened - การสอบสวน, การตรวจสอบหาข้อเท็จจริง
  • invoice: a document giving details of goods or services that someone has bought and must pay for - ใบแจ้งราคา
  • involved (verb): taking part or having a role in something - เกี่ยวข้อง, มีบทบาท
  • item: a single article or object - รายการ, รายการสิ่งของ
  • luxury: the best and most expensive of something - ที่หรูหรา 
  • managed: in the end, did do something, but it was difficult and seemed not possible -
  • mechanisms (noun): methods or systems for achieving something - กลไก, วิธีการทำงาน, วิธีการ
  • media: radio, television, newspaper, the Internet, considered as a group - สื่อ
  • misconduct: unacceptable or bad behaviour by someone in a position of authority or responsibility - การประพฤติผิด
  • miss: fail to reach or achieve a certain level or target or goal -
  • normal (adj.): typical, usual or ordinary; what you would expect - ปกติ, ภาวะปกติ
  • officials: people who have the power to make decisions or enforce the law - เจ้าหน้าที่ผู้มีอำนาจ
  • ongoing: continuing - อย่างต่อเนื่อง
  • original: the first of something - เดิม, แบบฉบับ
  • previously: before -
  • probe: an attempt to find out the truth about an issue, problem or accident, made by an official group (or by the media); an investigation - การตรวจสอบ  การสอบสวน
  • proper (adj.): in a way that is correct and/or appropriate - อย่างเหมาะสม, อย่างถูกต้อง
  • provide: to give someone/ something that they want or need - จัดหาให้, จัดเตรียมไว้ให้
  • raid: to forcefully and suddenly enter a place to catch criminals or to search for something like drugs or, in this case, fake passports - ใช้กำลังเข้าค้นสถานที่หรือ จับกุมคนร้าย
  • rampant: existing, happening or spreading in an uncontrolled way - รุกลาม อาละวาด กำเริบ รุนแรงจนควบคุมไว้ไม่ได้
  • reflect: to show - สะท้อน แสดงถึง
  • register: to put your name and other information on an official list in order to be allowed to do something, e.g., vote, study, stay in a hotel etc - ลงทะเบียน
  • registration: the process of recording names or information on an official list - การขึ้นทะเบียน, การลงทะเบียน
  • revenue: income from taxes or business activities - รายได้
  • risk: to cause someone or something to be in a dangerous situation - เสี่ยงอันตราย
  • saga: a long complicated series of related usually negative events - การเล่าอย่างยืดยาว
  • second-hand (adjective): not new; owned by somebody else before - ใช้แล้ว, มือสอง
  • seize (verb): to take control of by force or official power - ยึกครอง
  • seizure: the act of taking control of something, especially by using power or force - การบุกเข้ายึด
  • state: government - รัฐบาล
  • subject to: to require something to be done; to make somebody/something experience, suffer or be affected by something, usually something unpleasant - ต้องมีการ..., ทำให้ได้รับ
  • subsequently: happening or coming after something else - ซึ่งตามมา
  • suspicion (noun): a belief that a crime or improper activity has been committed - ความสงสัย
  • taken apart: the break or split something into the pieces from which it is made -
  • task: to give someone a particular responsibility - หน้าที่
  • tax: money that you have to pay to the government so that it can pay for public services - ภาษี
  • tax dodger: people who do not pay taxes that they should pay; guilty of tax evasion -
  • tax evasion: deliberately not paying the taxes you owe - การหนีภาษี
  • tempt (verb): to make people want to have something, do something, etc - ล่อใจ,ยั่วใจ
  • total: including everything; being the amount or number after everyone or everything is counted or added together - ทั้งหมด
  • unusually: different from what is usual or normal - ผิดปกติ
  • vehicle: a machine that you travel in or on, especially one with an engine that travels on roads, e.g., a car, bus, van, truck, etc. - ยานพาหนะ
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