Thai tax scam gang busted for billion-baht VAT fraud racket

Suspect set up 20 companies to fake transactions and VAT

The Revenue Department and the Central Investigation Bureau (CIB) have dismantled a sprawling value-added tax (VAT) fraud network, allegedly responsible for over 1 billion baht in state losses.

On June 26, coordinated raids were carried out across 14 locations in Tak, Chiang Mai and Bangkok. The operation led to the arrest of 63 year old Samran Naowarat and nine associates accused of orchestrating the elaborate scheme.

 

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Police Major General Thatphum Jaruprat, commander of the Economic Crime Division (ECD), said the crackdown followed intelligence received from the Revenue Department about Samran’s company, S&M Brotherhood General Trading Co Ltd.

Thai tax scam gang busted for billion-baht VAT fraud racket | News by Thaiger

According to investigators, Samran registered 20 VAT-registered companies under the names of family members, friends and employees. These shell entities were used to generate fictitious transactions, inflating the value of goods and the 7% VAT, despite no real trade taking place.

Officers allege S&M Brotherhood then purchased these overpriced goods on paper for export to Myanmar, creating bogus export documents to support VAT refund claims. Because the goods, mainly consumer products, were exempt from export duties and VAT, the group could legally claim large refunds based on inflated purchase tax amounts.

Thai tax scam gang busted for billion-baht VAT fraud racket | News by Thaiger

Thai tax scam gang busted for billion-baht VAT fraud racket | News by Thaiger

Thai tax scam gang busted for billion-baht VAT fraud racket | News by Thaiger

Thai tax scam gang busted for billion-baht VAT fraud racket | News by Thaiger

Pol. Maj. Gen. Thatphum said the suspects exploited the loophole by repeatedly creating fake sales to support their claims. Between 2021 and 2022 alone, the network reportedly pocketed over 150 million baht in VAT refunds, with the total losses to the state exceeding 1 billion baht.

During the raids, officers seized more than 100,000 documents, 20 mobile phones, and 30 computers and electronic devices believed to be evidence of the fraud.

Charges filed against the suspects include the illegal issuance of tax invoices, attempted VAT evasion, using forged invoices for tax credits and filing false claims, reported Bangkok Post.

The group has been transferred to the ECD for legal proceedings.

Thai tax scam gang busted for billion-baht VAT fraud racket | News by Thaiger

Police warned other businesses to avoid similar practices and urged the public to report any suspicious VAT refund activity. The investigation is ongoing, with officials examining whether further accomplices or companies were involved in the scam.

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Puntid Tantivangphaisal

Originally from Hong Kong, Puntid moved to Bangkok in 2020 to pursue further studies in translation. She holds a Bachelor's degree in Comparative Literature from the University of Hong Kong. Puntid spent 8 years living in Manchester, UK. Before joining The Thaiger, Puntid has been a freelance translator for 2 years. In her free time, she enjoys swimming and listening to music, as well as writing short fiction and poetry.
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