Public Statement: The Revenue Department used as a political tool to discriminate against CSOs

While the Government of General Prayut Chan-ocha is making an effort to introduce a law to empower the state to control and restrict independence of civil society organizations which operate for community and social development without seeking profits, there has been an order from the government for the Revenue Department to conduct tax audits on at least six nongovernmental organizations working on human rights. These organizations are known to call out the government on community rights, the right to freedom of expression and to demand constitutional amendments to ensure Thailand’s constitution genuinely reflect the needs of the people.

Since December 2021, at least six CSOs working on human rights and development including the Thai Volunteer Service (TVS), the ENLAW Foundation (EnLaw), the Foundation for Community Educational Media (FCEM) (Prachatai), the Thai Lawyers for Human Rights (TLHR), the Human Rights Lawyers Association (HRLA) and iLaw have gradually been notified of a request to conduct tax audits by the Revenue Department.

Officers from the Revenue Department invoke their power pursuant to the Revenue Code’s Section 88/3 to audit and offer advice on taxation. But during their visits to audit some organizations, they claimed the audit was being conducted thanks to a complaint filed by a “government agency” which they could not reveal the name. They also asked for detail about the sources of funding and how it has been used, particularly funding from NED or the National Endowment for Democracy which appeared to garner their special attention. They also asked to see the historical financial documents which were irrelevant to the filing of tax returns.

Such a field tax audit by the Revenue Department at the offices of CSOs was unprecedented. This time, it took place in six organizations almost at the same time and in a similar manner. All these six organizations have been engaged with human rights work and holding an attitude different from the current administration and the governments that seized power through a military coup. It also happened at the time the government is trying to introduce a new law to control the activity and funding of CSOs.

Apparently, these tax audits by the Revenue Department do not merely aim at offering taxation advice as claimed. Rather, it is the use of revenue mechanisms to dig up information and impose undue burden on organizations which hold different views from the current administration. And this is tantamount to an act of discrimination.

The valued added tax audits fall within the purview of officers from the Revenue Department to protect state interest concerning tax collection. Every organization which legally pays their due taxes is willing to present any documents concerned with the filing of their tax returns for examination. We, however, do not want to witness how the government is exercising its power and is using the revenue authorities as a tool to cement its political power, not dissimilar to its effort to issue abusive laws to proliferate its power in the past eight years.

We deem that by using the Revenue Department as a political tool to discriminate against CSOs which demand human rights, the government has committed a gross misdemeanor. The government must allow the Revenue Department to perform its duties as usual and respect the independence and the right to hold the government to account of CSOs which work for the interest of community and society.

Internet Law Reform Dialogue (iLaw)
ENLAW Foundation (EnLaw)
Foundation for Community Educational Media (FCEM) (Prachatai)
Thai Volunteer Service (TVS)
Thai Lawyers for Human Rights (TLHR)
Human Rights Lawyers Association (HRLA)

A summary of facts on the Revenue Department’s actions against NGOs

1. Human Rights Lawyers Association (HRLA)

Formed by a group of human rights lawyers, attorneys and activists, the Human Rights Lawyers Association (HRLA) works to promote the rights in the justice system through its three main components of program including capacity building for lawyers, academic work and campaigns and strategic litigations to advocate for legal and policy reform more compatible with human rights. 

HRLA received a letter dated on 19 November 2021 requesting for a meeting at its office from the revenue officers. They said they wanted to come visit on 30 November 2021 and asked us to prepare and make available documents related to the fiscal year of 1 January-31 December 2020 for their examination. The documents included financial reports, income and expense reports, receipts and vouchers, bank statements, etc. But since the letter only arrived after the meeting date, another letter has been sent to us asking for another meeting on 14 December 2021 with the submission of the aforementioned documents.

The finance officers with authorization from the HRLA’s President then met with the revenue officers with the documents as requested. The revenue officers asked for detail of HRLA’s implementation, its funding sources and income for its operation, particularly detail of the activities funded by NED. The revenue officers also asked for additional documents concerning funding from NED including the grant contracts for the fiscal year of 2020 (in which year, HRLA received funding from NED, NHRF and BELL). On the following day, HRLA has submitted to the authority a copy of grant contracts in the fiscal year of 2020. Later, on 23 December 2021, the revenue officers have contacted and asked for more documents including the progress reports submitted to NED for the fiscal years of 2020-2021 and HRLA has already sent them the documents on 4 January 2022. Nevertheless, on 26 January 2022, the revenue officers asked for more documents again including the progress reports and grant contracts for the fiscal years of 2019-2020 and HRLA has send them the documents on 31 January 2022. No other requests have been made. 

2. iLaw

iLaw is a nongovernmental organization which advocates for democracy and freedom of expression. iLaw focusses on developing a database useful for advocacy work and engendering public participation relying heavily on the utilization of online platforms including websites and social media. iLaw has also been instrumental in the sign-on campaigns to support petitions for constitutional amendment, the revocation of Announcements and Orders of the NCPO and the repeal of Section 112.

On 20 January 2022, the Revenue Department has sent them a letter requesting for a visit to the office to conduct a tax audit and to advice them on taxation. It was agreed that they would conduct the audit on 7 February 2022. iLaw has prepared the documents for the examination and planned to videotape the entire inspection and meeting.  Upon their arrival, the revenue officers did not permit the filming, although iLaw insisted that the filming of the scene when officers are performing their duties was permissible by law. As a result, the revenue officers have immediately headed back. 

3. Foundation for Community Educational Media (FCEM)

Prachatai is an online news outlet run by the Foundation for Community Educational Media (FCEM) aiming to disseminate information in society, particularly on social and political issues, the right to freedom of expression, etc.

Prachatai has received a letter dated 9 December 2021 from the Revenue Department indicating their request for a meeting at the Revenue Office and the presentation of documents on 27 December 2021. The documents requested for by the Revenue Department included the financial report of 2020, bank statements of 2020, the Foundation’s Regulations and reports of the annual regular meeting in 2020, income and expense reports of 2020 and rental and service contracts related to income and expense.  Nevertheless, the Prachatai’s accountants have, however, asked for one more month to submit the documents. As the deadline approached, and they were unable to prepare the documents in time, they contacted the authority again and asked for an extension. The revenue officers, however, asked that they meet before the submission of documents on 27 January 2022. Prachatai’s finance officers have thus gone to meet with them at the Revenue Department.

It turned out that the revenue officers only asked about funding from NED including detail as to how they received funding from NED and how much they have received so far. Prachatai’s finance officers therefore responded that a project proposal has to be written to seek annual financial support and a progress report has to be furnished every three months and that they received about 70,000 USD a year. Then, the Prachatai’s finance officers have asked the revenue officers that since Prachatai has been receiving funding from NED for several years, why did they just conduct the audits now? Have there been any complaint? The revenue officers replied that other agencies have complained with them and hence the examination. During the meeting, the revenue officers wrote a report about funding received from NED and requested for a copy of the grant contracts made with NED and the financial report of 2020 which shall be submitted later.

4. ENLAW Foundation (EnLAW)

ENLAW Foundation (EnLAW) is a nongovernmental organization working on human rights and environmental law. It advocates for the exercise of community rights in various places to participate in decision making process and to exercise the rights in the judicial system to protect natural resources, the environment, health and community livelihood. It also works to promote and uphold people’s rights and freedoms based on human rights and democracy.

EnLAW received a letter from the Revenue Department in November 2021 requesting for a visit to its office on 22 November 2021. It was indicated in the letter that they wanted to give them advice on taxation. On that day, the revenue officers arrived showing their ID cards and the letter officially indicating their purpose to examine the organization’s financial documents. They inquired about the objectives to form the organization and its activities as well as detail about funding support. The revenue officers also requested for all financial documents of 2020 on that day, but EnLAW told them that they needed time to prepare the documents and would send them later since there were a lot of concerned documents. Then, the revenue officers asked to see the grant contracts and if EnLAW could furnish them for examination. As to their request to examine detail of the implementation of various projects, EnLAW declined the request viewing that such information was not relevant to the tax audit of the value added taxes and therefore the Revenue Department was not authorized to examine the documents. They even asked the revenue officers as to why they had to conduct the tax audit with EnLAW, to which the revenue officers replied that EnLAW was late in filing its tax returns and it prompted them to conduct the audit.

The revenue officers have contacted them again asking for more clarification including detail as to which staff members in the organization were funded by which funder. EnLAW has declined to give such information viewing that the revenue officers had no power to examine this matter and it was after all an internal matter. Then, the revenue officers have sent them another letter summoning them to meet and give more information on 20 December 2021. While the meeting was coordinated, EnLAW was informed that the authority was not yet done with examining the documents they had received and there was no need for another meeting then. At the moment, it is pending the examination of documents by the revenue officers and EnLAW has not received the financial documents back from them. 

5. Thai Volunteer Service (TVS)

Thai Volunteer Service (TVS) works to provide capacity building to youth leaders to help develop their leaderships for social transformation and to create a space in which young people can be conscientized, learn and pick up skills to mobilize for a just, equal and peaceful society. They organize various volunteer programs including the human rights volunteers, the citizen volunteers, the volunteers for sustainable community (volunteers returning home), the volunteers for communication on human rights and supports youth to get socially engaged through the one-year volunteer program and the presentation at its completion with support of allowances. 

The revenue officers have sent them a letter indicating that on 28 November 2021, they would come to their office to give them advice on taxation. TVS was asked to prepare the financial accounts in advance. It was unclear then which matters the revenue officers wanted to examine. When the revenue officers arrived, they examined the organization’s financial documents as usual, but also inquired about funding from NED and asked to see the transfer slips. Then, the revenue officers inquired about TVS’s activities and the objectives and the TVS’s finance officers explained to them. During the questioning and examination of documents, the revenue officers have prepared a memo for them to sign. But when TVS asked for a copy of the memo, the revenue officers refused to allow them to make a copy, although they were allowed to write the detail down by hand.  At the completion of the exami8nation, the revenue officers said that they would request for additional financial documents for their review. The TVS’s finance officers responded to them by saying the submission of such documents had to be proposed and approved by the Foundation’s Board of Directors. Then, the revenue officers have sent them a letter indicating that the examination of TVS’s financial documents has been completed.   

6. Thai Lawyers for Human Rights (TLHR)

The Thai Lawyers for Human Rights (TLHR) operates under the Rights for Justice Foundation (RJF). Formed by lawyers, attorneys and social activists, two days after the military coup by the National Council for Peace (NCPO), TLHR responded to the situation in which a number of individuals were summoned to meet and were subject to arrest and detention. They work on documentation of human rights violation in Thailand after the coup and has been offering legal assistance to the people who have been affected and disseminated information on legal and justice system reform. 

On 24 November 2021, officers from the Bangkok Revenue Department Region 7 have come unannounced to the office of Thai Lawyers for Human Rights (TLHR). They came with a letter introducing the four revenue officers dated 22 November 2021 to indicate that the visit to the office was an official examination pursuant to the Revenue Code. They claimed the examination would focus on certain issues pertaining to complaints received about the taxation of the “Rights for Justice Foundation (RJF)”, which is a legal entity of the Thai Lawyers for Human Rights (TLHR). The revenue officers have talked with the office staff inquiring about the structure of the Foundation, nature of its operation, sources of income and expense, the number of staff and office rental and then they just headed back while taking note of the information received. Then, the revenue officers asked the Foundation to send to them financial documents from 2019 to 2021, tax returns, and bank statements until 2021 within 17 December 2021. After receiving the documents, the Revenue Department would examine them and would then summon the Foundation’s auditor for an inquiry. On 17 December 2021, the accountants authorized by the Foundation’s Chairperson have brought the documents to the Revenue Department for examination. The review of the Revenue Department is still ongoing.