Probe to target Thai steel

Posted on 13 June 2017
 

Source: The Bangkok Post

 The Revenue Department is set to launch a tax evasion probe against steel-related companies nationwide to shore up revenue leakage and boost efficiency.

The department will summon large downstream steelmakers to guide them on how to pay tax correctly so as to avoid accounting errors, said Prasong Poontaneat, director-general of the Revenue Department.

For example, he said large steel producers might directly issue invoices on goods to upstream producers, bypassing middlemen and the Revenue Department, which cannot track the tax payment records of some small and mid-sized steelmakers, he said.

Moreover, some steel producers may have forged their invoices altogether.

The department intends to check the tax payment records of industry operators, from downstream to upstream, said Mr Prasong.

Local steelmakers have already been shielded from dumping by Chinese steelmakers and are benefiting from state investment in infrastructure megaprojects, he said, adding that steel trade value is expected to reach trillions of baht a year.

The Revenue Department's latest move comes after Finance Minister Apisak Tantivorawong instructed the Revenue and Customs departments to improve their tax collection efficiency and stem loopholes used to avoid tax payments after their tax revenue target missed the mark by 50 billion baht for the eight months to May.

"Upstream producers don't gain any benefits but they're considerate dealers who are struggling in a price war," Mr Prasong said. "If they [upstream makers] demand too much such as tax invoices, they are concerned that these dealers may not be able to buy their products. If we tighten [revenue collection], all players will be subject to taxes and their operating costs will be the same. This will level the playing field for all operators."

He said the Revenue Department is also targeting cash business operators such as restaurants, tourism-related businesses and pharmacies to entice them to pay their taxes in full.

The department is floating the idea of launching a mobile application to allow consumers to inform which restaurants do not issue tax invoices to force the operators to enter into the formal tax system, he said.

Thai companies have said that the Thai steel sector is still suffering losses due to massive oversupply and the government's massive investment in infrastructure projects has yet to help buoy the sector.

Vikrom Wacharakrup, chairman of the Iron and Steel Industry club under the Federation of Thai Industries (FTI), said the steel sector is still in a bearish mood with massive oversupply, particularly producers of steel rods that are used in the construction sector.

He said demand for steel rods stood at around 3 million tonnes a year, but supply was at 9-10 million tonnes, making producers suffer losses for years.

"It would be good if the government would inspect our situation to see if we're really suffering losses, because we've been suffering losses for years and there is still no sign of recovery," said Mr Vikrom.

He said the FTI had urged the Industry Ministry to help curb steel supply by not allowing new steel factories to be built, although that proposal went nowhere.



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