The strongest move by the country’s oldest political party since the charter drafting began months ago has injected more heat into the political situation. The Democrats are opposed to the question proposed by the National Legislative Assembly (NLA) on whether the appointed Senate should be empowered to join elected MPs in voting to select a new prime minister.

The Democrats, though, have so far declined to join the Pheu Thai Party in campaigning against the draft constitution, arguing that a no vote would lead to a redrafting of the charter and an extension of military rule.

Instead, they are calling on Prime Minister Prayut Chan-o-cha to clarify what a new charter would look like should the current draft fail to pass the national vote, tentatively scheduled for August 7. Government figures have suggested that a previous charter or mixture of charters could be wheeled into place should a no vote prevail.

The Democrat Party had previously fallen in line with the ruling National Council for Peace and Order (NCPO), but that has now changed.

The NCPO, meanwhile, has been consistently critical of politicians – particularly those who voice opposition to its rule. Democrat leader Abhisit Vejjajiva has now joined other politicians in rousing the junta’s ire. The Democrats have dubbed the draft constitution ” democracy in retreat”. Abhisit said the draft “distorts the democratic will and weakens people’s power compared with state authority”.

In response, General Prayut, who also heads the NCPO, slammed politicians who criticised the draft and the NLA’s additional question, saying it was a matter for voters. “They [politicians] have no right to decide whether to disagree or not. This is a national referendum and it’s a matter for the people,” he said.

Soldiers subsequently seized more than 1,600 boxes of medicines bearing the Democrat leader’s image and due to be distributed for Songkran by party officials in Kamphaeng Phet. The seizure marked the first such military action against the Democrats. Earlier, thousands of red Songkran bowls bearing a message from former prime minister Thaksin Shinawatra were seized from Pheu Thai Party politicians.

Abhisit urged the junta to be more tolerant of opinions different from its own. He said it could not force agreement and should instead heed opinions expressed with good intention. “The prime minister should not view people who disagree with him as enemies. They are in fact his good friends,” he said.

Only time will tell just how far the Democrats are willing to go in their opposition to the charter draft and additional referendum question. Meanwhile observers will be watching for changes in their relationship with the NCPO. It should be noted that many of the party’s supporters are avid backers of the junta. Will the Democrats be able to win back support from these people when the dust settles?

If the Democrats are serious about their opposition and also manage to regain support from disillusioned backers, the draft charter and the additional question are unlikely to get an easy passage at the referendum. As it has turned out, the country’s two largest political parties are both against the draft constitution.

The strongest move by the country’s oldest political party since the charter drafting began months ago has injected more heat into the political situation. The Democrats are opposed to the question proposed by the National Legislative Assembly (NLA) on whether the appointed Senate should be empowered to join elected MPs in voting to select a new prime minister.

The Democrats, though, have so far declined to join the Pheu Thai Party in campaigning against the draft constitution, arguing that a no vote would lead to a redrafting of the charter and an extension of military rule.

Instead, they are calling on Prime Minister Prayut Chan-o-cha to clarify what a new charter would look like should the current draft fail to pass the national vote, tentatively scheduled for August 7. Government figures have suggested that a previous charter or mixture of charters could be wheeled into place should a no vote prevail.

The Democrat Party had previously fallen in line with the ruling National Council for Peace and Order (NCPO), but that has now changed.

The NCPO, meanwhile, has been consistently critical of politicians – particularly those who voice opposition to its rule. Democrat leader Abhisit Vejjajiva has now joined other politicians in rousing the junta’s ire. The Democrats have dubbed the draft constitution ” democracy in retreat”. Abhisit said the draft “distorts the democratic will and weakens people’s power compared with state authority”.

In response, General Prayut, who also heads the NCPO, slammed politicians who criticised the draft and the NLA’s additional question, saying it was a matter for voters. “They [politicians] have no right to decide whether to disagree or not. This is a national referendum and it’s a matter for the people,” he said.

Soldiers subsequently seized more than 1,600 boxes of medicines bearing the Democrat leader’s image and due to be distributed for Songkran by party officials in Kamphaeng Phet. The seizure marked the first such military action against the Democrats. Earlier, thousands of red Songkran bowls bearing a message from former prime minister Thaksin Shinawatra were seized from Pheu Thai Party politicians.

Abhisit urged the junta to be more tolerant of opinions different from its own. He said it could not force agreement and should instead heed opinions expressed with good intention. “The prime minister should not view people who disagree with him as enemies. They are in fact his good friends,” he said.

Only time will tell just how far the Democrats are willing to go in their opposition to the charter draft and additional referendum question. Meanwhile observers will be watching for changes in their relationship with the NCPO. It should be noted that many of the party’s supporters are avid backers of the junta. Will the Democrats be able to win back support from these people when the dust settles?

If the Democrats are serious about their opposition and also manage to regain support from disillusioned backers, the draft charter and the additional question are unlikely to get an easy passage at the referendum. As it has turned out, the country’s two largest political parties are both against the draft constitution.

With regard to the politicians, the National Anti-Corruption Commission (NAAC) is empowered to go after their financial records. Those who hold or used to hold public office are required by law to report their assets in Thailand and abroad to the anti-graft agency before taking and after leaving office.

In this context, assets hidden abroad in offshore shell companies as arranged by the law firm could draw legal action if it can be proved they exist under the names of ex-politicians or their nominees.

Coincidentally, the leak happened just as the military-led government is about to hold a referendum, possibly in August this year, on a new draft charter that would reduce the powers of elected politicians.

In addition, the Anti-Money Laundering Organisation (AMLO) is tasked with investigating suspected cases in which illicit money from trafficking of narcotics and people, and other crimes was laundered and hidden in offshore tax shelters.

For rich businessmen and celebrities, it is not unusual to set up offshore companies to minimise or avoid tax payment. Even well-known multinational companies in the West utilise such means as a crucial part of their tax and asset management strategies to avoid bringing funds into countries where tax liabilities are relatively high.

Meanwhile Thailand-based wealthy individuals and companies seek loopholes to park their money abroad and then, with the help of specialist lawyers and bankers, manage to get those funds back into Thailand through various channels and methods.

In fact, Panama is not the most popular tax shelter for Thais, but many do use the legal services of Mossack Fonseca to manage their assets abroad. The Panama-based law firm has a branch office in Bangkok.

In terms of overseas investment by Thailand-based persons and entities, the Cayman Islands is the most popular destination with nearly $10 billion in outstanding investment, followed by Singapore ($8.1 billion), Hong Kong ($7.7 billion) and Mauritius ($6.7 billion).

Among the major sectors with the most overseas investment are mining, financial services and insurance, food and beverages, and real estate.

Generally speaking, these overseas investment activities are legal since businesses have to manage their investment portfolios and tax liabilities efficiently.

However, there are loopholes for those who intend to hide their ill-gotten wealth or avoid the hefty tax liabilities if they bring home income from abroad.

To manage those funds, secretive offshore companies are set up in territories where rules and regulations create tax shelters.

In this context, US regulations are currently among the strictest, requiring banks around the world to report any American citizen’s overseas deposits which are in excess of $50,000.

Yet, there are still many loopholes for US firms seeking to avoid hefty taxes back home. For example, Apple held more than $181 billion in offshore accounts to avoid paying billions of dollar in federal taxes.

The practice, which is common among major technology firms such as Cisco, Google and Hewlett Packard, is legal but has raised ethical questions.

Hence, the problem as caused by the rich and powerful is global in nature and affects every capitalist society.

Proposed by the National Legislative Assembly (NLA), the question would be tacked onto the central question of whether voters accept the draft written by the Constitution Drafting Commission (CDC).

Yet things would be complicated by the inclusion of two questions on one single ballot.

According to 2014 interim charter, which was amended to allow the NLA to propose a question, if voters’ answer to the additional question is not in line with the charter draft, the CDC would need to adjust the draft accordingly.

Chances are 50:50 that the CDC will have to make that adjustment after the referendum result before submitting its draft for review by the Constitutional Court.

There are four scenarios for the August 7 referendum:

– A yes to charter draft and a yes to empowering the Senate to choose a PM.

– A yes to the draft and a no to the additional question.

– No to the draft and a yes for the additional question.

– No to the draft and no to an empowered Senate.

The third scenario of no to the draft and yes to the Senate’s additional power could lead to the most complications. In this scenario the junta would need to draft a new charter stipulating a Senate empowered in accordance with the referendum result. That would mean postponing the date of the general election, currently set for September 2017 at the soonest.

The second scenario of yes to the draft and no to extra Senate power would be the least complicated, as the election could go ahead immediately without any need to change the draft. But the National Council for Peace and Order (NCPO) certainly wouldn’t be happy at failing to get what it wants, which is control in Parliament via the appointed Senate.

So the junta would seek a way to add the special Senate power to the draft.

The additional question has sparked furore among politicians.

On one hand, they view empowering an appointed Senate to choose the head of government as illegitimate since the appointed officials would not be representative of voters.

Politicians are opposed to a move that would dilute their power with 250 senators appointed by the NCPO.

Simply put, the 250 senators would become members of the “NCPO party” in Parliament.

Politicians from the two major parties, Pheu Thai and the Democrats, have slammed the NLA’s move to approve the additional question. They say it implies that elected members of the House of Representatives would not be necessary. Worse still, it would pave the way for an “outsider” with no affiliation with any political party to become PM.

On the positive side, the junta has now revealed all of its cards.

The question itself is the “ace”, revealing to voters the junta’s desire to retain power after the next election through the Senate.

So, voters who now know in advance that the junta does indeed want to stay can make a decision on whether to approve that desire or not.

The junta is taking a gamble by adding the question to the referendum. While the charter draft is being used as an indicator of whether voters accept the junta, the additional question provides a test of whether citizens accept the perpetuation of junta powers.

The Pracha Rath scheme covers public-private partnerships (PPP) for the construction of national infrastructure and is a pet project of Prime Minister Prayut Chan-o-cha, who is desperate for it to go well.

The idea is for partnerships that lead to benefits for both the public and the private sphere, but for that to happen both sides must commit to “growing together” in good faith.

Concealing vast sums of money overseas could be a breach of that faith. As such, Thais were keen to hear whether any names featured in the massive leak of offshore financial dealings are also involved in the government’s Pracha Rath scheme.

It has since been disclosed that among almost 1,000 Thai names in the leak of 11.5 million documents last week are singers, athletes, politicians and key business figures. More significantly, some of those business figures are working with the government on public projects.

Using foreign legal and accounting firms to do business or store wealth in tax havens is neither unusual nor necessarily illegal.

Yet the secrecy and confidentiality it affords makes it a favoured method for money launderers, tax evaders and others who want to conceal funds.

And that information blackout naturally triggers suspicion regarding Thais who have established companies in tax havens.

So far, very few of those individuals have been brave enough to come forward and explain why their names appear in the Panama Papers.

That mirrors the general practice in Thai business, where big firms remain reluctant to disclose details of their offshore entities in their annual financial reports.

Such financial secrecy in a bid to minimise tax burdens is generally seen as legitimate business practice and can be perfectly legal. But that doesn’t mean all such transactions are legitimate.

The Prayut government is currently making strenuous efforts to bring the underground economy of entrepreneurs and small and medium-sized enterprises into the tax payment system. These people typically have little money to hire law firms to shield them from taxation. Meanwhile efficient taxation of salaried workers ensures that public funds keep flowing. That effort and efficiency seems to slacken markedly when the focus turns to the wealthy.

The Anti-Money Laundering Office (Amlo) has announced it will coordinate with counterparts in other countries to probe the transactions of Thais whose names appear in the Panama Papers. Authorities have promised to give more details at a press conference today.

The question is, can authorities force these individuals and other Thais to disclose details of their opaque overseas dealings, or must the public depend on voluntary declarations?

In particular, should the business figures who are involved with Pracha Rath projects and whose names appear in the Panama Papers be spurred to disclose information?

The judgement will depend upon how much public pressure is brought to bear.

But without such information, how can a doubting public trust that Thai corporations are sincerely committed partners in national growth?