ป้ายกำกับ: Khemmapat Trisadikoon

Time to overhaul outdated fine system

เขมภัทร ทฤษฎิคุณ

First Published in Bangkok Post on August 28, 2024. This op-ed was written by Khemmapat Trisadikoon and Chattrika Napatanapong.

If you think our legal system is fair by imposing the same penalty on everyone for the same offence, think again.

Take the system of fines. Imposing the same fines on both the rich and the poor for the same violation hurts the poor while leaving the rich virtually unaffected.

To ensure fairness, this outdated system needs urgent reform.

Why focus on the fine system? Because the law mandates that courts use fines for less serious offences. Therefore, fines are the main penalty used by lower courts across the country, affecting the majority of people.

Between 2018 and 2022, the courts used fines in their verdicts far more often than imprisonment and detention, excluding suspended sentences, according to the Office of the Judiciary.

Thailand’s rigid fine system uses fixed fines for the same offence for everyone. For example, a particular crime may specify a fixed fine between 500 to 15,000 baht. Imagine the difference a street vendor and a millionaire face when ordered to pay a 10,000-baht fine.

This fixed fine system, which specifies the exact amounts for a violation, creates two problems: unfair penalties and outdated fines that cannot keep up with economic changes.

Firstly, unfair penalties. While imposing the same fine on everyone may seem fair, it definitely is not. Disregarding the country’s gross economic disparity, this system does not consider the economic status, income, or financial burden that affects low-income offenders more than the well-off.

Since those with money are not affected by the fines, they may continue to break the law because they are not afraid of the punishment.

Meanwhile, low-income offenders may have to choose imprisonment over paying the fines because they do not have the means to, reflecting disparity and social inequality in Thai society.

The Ministry of Justice and the Office of the Judiciary introduced measures like EM bracelets with bail or instalment payments for fines to address this concern. True, they might help reduce the number of people in jail, but they do not address the problem of disparity and unfair penalties.

Secondly, outdated fines that are out of touch with the present time. Since the fines were set long ago, they have become too low due to inflation over time.

Believe it or not, a study by the Thailand Development Research Institute shows that there are 420 laws that are still enforcing fines set as far back as 1859. One of them is the 1902 Clean Canal Act, which set the fine for littering in canals at just 20 baht.

However, setting the new rate of fines requires new legislation, which can become outdated by the time it is enacted.

To ensure fair and effective fines, Thailand can learn from the initiatives of other countries.

One solution is to eliminate fixed fines and replace them with fines per day that vary with the severity of the offence, the offender’s economic status, and their daily income to calculate appropriate fines.

The formula of the day-fine system is: fine = number of offence units (fine days) x the offender’s net daily income.

For example, running a red light is punishable by a fine of up to 4,000 baht without a jail term. Since it is not a severe offence, the fine may be calculated as five fine days x 1,000 baht net daily income, resulting in a 5,000-baht fine.

Different countries, however, have different systems for calculating variable fines according to their specific contexts.

For example, Germany uses two main factors to calculate daily fines: the number of fine days and the offender’s personal and financial circumstances, including occupation, income, and living conditions. This data, gathered through police investigations, is used to determine the offender’s net daily income.

In Finland, the police and prosecutors initially set fines for offenders. If these fines are not paid, the court decides whether to impose a new fine or a jail term. The penalty is based on the offender’s net daily income and information from their latest tax return, which can be accessed by the court and state authorities.

Meanwhile, several states in the United States have begun using the variable fine system before and after court procedures. For low-income offenders, the unemployed, and other vulnerable groups, the court may consider using the income of their spouses or carers to calculate their net daily income.

Several changes will be necessary for Thailand to adopt variable fines for a fair and effective system.

Most importantly, new legislation is needed to create a variable fine system, requiring other laws to change their penalties accordingly. This new law should also set rules and criteria on how it works.

First, it must determine which offences should be covered by the variable fine system. Our stance is that it should apply to all offences with fine penalties. In the initial stage, it should start with minor offences, traffic violations, and environmental and economic crimes.

Second, it should establish the rules for calculating the number of offence units or fine days. Our stance is that the fine days should be based on the severity of the offence comparable to the jail sentence. For example, if the jail term is more than one year, the number of fine days may be set at 360 days for each year of the verdict. If the verdict for a lesser offence is only one month, then the fine penalty may be calculated as 30 fine days.

Third, the law should establish criteria for using the offender’s economic status in calculating the number of fine days. It should also specify the factors that can reduce fines, such as income level, tax burden, and living expenses. These factors reflect the offender’s real net income and help determine proportional fines.

Apart from drafting the new law to institutionalise the fine-per-day system, the government needs to create implementation guidelines for relevant agencies, such as the police, prosecutors, judges, and officials in political administration, to collaborate on the procedures. Officials from the Revenue Department and social security agencies may also take part in determining the net income of the offenders. These proposals are part of what the government, political entities, and state agencies need to prepare to implement a fair and efficient variable fine system.

By updating the fine system to reflect economic and social realities, Thailand can move one step closer to a more just and equitable legal system. It is time for change.

Fixing fiscal laws to have fair elections

เขมภัทร ทฤษฎิคุณ

First Published in Bangkok Post on Wednesday, May 10, 2023

As election campaigns are heating up, political parties are fiercely competing to win votes by offering generous cash handouts, raising concerns about their impacts on the country’s fiscal discipline for the incoming administration.

It is a legitimate concern. Yet the focus on the post-election financial burden should not overshadow the outgoing administration’s last-minute budget spending for political gains, which also endangers fiscal discipline.

The 2018 State Fiscal and Financial Act mandates that the government exercise strict fiscal restraint and forbids it from pursuing political popularity at the expense of the nation’s long-term interests. This law also establishes fiscal rules and regulations on how the government must manage state income and expenditures while imposing a limit on the accumulation of public debt.

Yet, legal loopholes can be exploited during an election period. In order to advance their political agendas, departing administrations may decide to forego transparency by going on a spending binge right before leaving office, which is a  flagrant breach of fiscal responsibility.

Such spending for political gains includes the government’s approval towards the end of its rule to increase the salaries of certain groups of officials to win their support at the polls.

Just one week before the Parliament was dissolved on March 20, the cabinet approved raising the annual salaries of 5,300 subdistrict administrative organizations, or Or Bor Tor, across the nation to 13,744.69 million baht. This represents an increase of 44.66% or 4,252 million baht over the previous salary base.

The very same day, the cabinet approved the salary increase of sub-district heads or kamnan from 10,000 to 12,000 baht, the village heads from 8,000 to 10,000 baht, and sub-district health officials from 6,000 to 7,000 baht.

A week earlier, the cabinet had approved monthly financial support for village health volunteers across the country from 1,000 to 2,000 baht. Notably, their pay was increased by the previous administration from 600 to 1,000 baht, also just before the election.

In addition to salary increases for the groups of officials who could act as voting bases, another strategy is to approve projects to garner public support through quasi-fiscal channels.

This is accomplished through the cabinet’s approval for state loans from the government’s specialised financial institutions like the Government Savings Banks or the Bank for Agricultural and Agricultural Cooperatives (BAAC). According to the loan agreements, these banks will finance specific government initiatives, and the succeeding administration will repay the loans from the national coffer.

A recent example is the Prayut administration’s approval of the One Million Cows Project, which is being managed by the National Village and Urban Community Fund Office through loans from the Bank for Agricultural and Agricultural Cooperatives. Under this four-year project, the village fund office will lend money to farming families so they can each purchase two cows, and the following administration will repay the bank for the loans.

The outgoing government may have the best of intentions, but these policies are tied to future national budget spending. The government must, therefore, uphold fiscal responsibility and transparency by outlining the expenditure in detail and indicating how it will affect the budget of the administration that comes after. In addition, using the budget in this manner may create political popularity that surpasses the opponent, which should not come from using the state budget.

Despite the law on fiscal discipline, it does not cover how the government uses national budgets when elections are imminent. The election law and regulations also contain no restrictions on the use of the national budget to sway elections.

To close these legal loopholes, a system of oversight for the final budgetary expenditures of the departing government must be added to the current law on fiscal discipline.  This system is also crucial to ensure a fair election and prevent the government from abusing its authority against the opposition and smaller political parties.

Such a budgetary oversight system to guarantee fiscal discipline and fair elections is not uncommon in other countries.

For example, in Australia, the Charter of Budget Honesty Law mandates that the government publish an economic and financial report within 10 days of the election’s date being set.

The government has a responsibility to inform the populace of the economic and financial situation before an election.  The report includes the amount of public debt, long-term fiscal liabilities, and budgetary spending.  The report’s objective is to provide information to assist voters in their voting decisions.

Meanwhile, in Brazil, raising the pay of public employees during one’s final year in office or the parliament is regarded as a fiscal crime. 

Thailand should consider Australia’s model. The economic and financial report on the country’s situation is important for the government’s transparency and credibility. Public access to information also strengthens the democratic process. 

The Brazil model, however, is complicated legally and difficult to find solid proof, which ultimately renders the legal efforts futile.

At present, Thailand does not have a strong and independent state agency to monitor the repercussions of the government’s fiscal policies like the Congressional Budget Office in the United States. Given the widespread criticism of the so-called “independent” constitutional organizations at the moment, however, it is not a smart idea to create yet another independent state organisation to carry out this oversight function.

Instead, a viable alternative is to support civil society and academia to monitor and evaluate government spending. However, to effectively close the legal loopholes in the fiscal discipline law, an elected government should set up a legislative budget office once it assumes office.

Otherwise, any administration will be able to continue using taxpayer money improperly by going on last-minute spending sprees to sway voters’ ballot decisions. 

Fiscal discipline is not the only issue at hand. A free and fair election is crucial to democracy. To safeguard the country’s fiscal integrity and democratic values, this political abuse of the national coffer must end.