January 19, 2016 – Thailand’s prosecutor has charged the local unit of Philip Morris International of under-reporting the value of imported cigarettes, which led to tax revenue losses of about 20 billion baht (US$551.27 million), the attorney-general said.
The case involves cigarettes imported by Philip Morris Thailand from the Philippines between 2003 and 2007, the prosecutor told reporters. In addition to the company, seven Thais were also charged, as well as four foreigners who were outside the country, they added.
A court will hear the case on April 25. If convicted, the company will have to pay 80 billion baht in damages, and each defendant faces up to 10 years in prison. Philip Morris Thailand said the charges were unjust.
“Not only are these charges wholly without merit … they also call into question Thailand’s commitment to fairness, transparency and rule of law,” branch manager Troy Modlin said in a statement.
A 2010 ruling by the World Trade Organization said that Thailand had no grounds to reject the import price of cigarettes from the Philippines, and Thailand has previously lost a case over the issue.
The Philippines has complained that a series of domestic taxation and customs valuation by Thailand that started in 2006 had undermined the competitiveness of its cigarettes against those produced by the state-controlled Thailand Tobacco Monopoly.