News No.   : 11/2007

Date              : 15 February 2007

Subject        : RD and DSI arrested those involved in fraudulent tax refund claims.

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                         On 15 February 2007 Mr. Sanit Rangnoi, Director General of the Revenue Department (RD), and a representative from DSI jointly made a declaration on the exposure of the tax refund scam. The personal income tax e-filing initiative of the Revenue Department has provided convenience to taxpayers resulting in fast tax refunds. Nevertheless, certain groups of people have manipulated the scheme by making false tax refund claims by contacting employees of various companies to ask for names, personal ID, personal bank account numbers. They claimed that they would make tax refund requests and file tax returns via internet on behalf of these clients. In doing so, they made up egregious withholding tax amount in order to request tax refund. They would charge a certain fee in return for tax refunds on behalf of the client such as a fee of 500 baht for tax refund of 3,000 baht.

                        In another case, a company made up fictitious expenses such as broker fee and remitted withholding tax to the RD. It deducted such amount as expenses in the calculation of net profits resulting in less tax payment. At the same time it prepared the tax return and requested tax refund on behalf of the employee even though the employee never received the phantom broker fee.

                        The RD has been able to monitor tax refund requests for potential problems though the utilisation of the computer system. Every wrongdoer faces legal action. The RD has filed charges with DSI and has been able to arrest those involved. They face litigation for collaborating or attempting to embezzle government revenues under Sections 341 80 and 81 of the Civil and Commercial Code and face imprisonment up to 3 years and fine not exceeding 6,000 baht or both.

                        The RD therefore wishes to advise that the above fraudulent actions are illegal. You are advised to stay away from unscrupulous promoters as you may end up being accused by government authorities of making abusive tax refund claims. Anyone who is aware of such wrongdoing may report to the RD at P.O. Box 345 Samsen Nai Bangkok 10400 or at telephone number 0-2272-8000.