Health lobbyists and academics have renewed their pleas to have 12 Philip Morris executives face court for the alleged masterminding of a tax evasion scheme worth billions of baht.
In a case which has spanned the past 10 years, the tobacco giant stands accused of deception by under-declaring the value of its cigarettes and depriving the government of an estimated 68 billion baht in lost tax revenue.
The Thailand Health Promotion Institute (THPI), along with academics, yesterday appealed to the Office of the Attorney-General (OAG) to urgently proceed with an indictment of 12 Philip Morris employees.
THPI chairman Hatai Chitanondh said there had been no serious moves to prosecute, despite past calls from the Department of Special Investigation (DSI) and the Commerce Ministry.
In October 2013, former attorney-general Julasingh Vasantasingh agreed to indict 12 out of 13 suspects in the case — including four foreigners — just as he retired from office. Mr Julasingh signed the indictments only one week before his departure but no progress has been made since.
Hatai: Investigation too slow
The decision to bring charges against the company executives came after a six-year battle of wills between the DSI and the OAG.
The DSI had stepped in to probe allegations against the tobacco giant in 2005. It found that Philip Morris (Thailand) had under-reported the value of its products when declaring them to the Customs Department between 2003 and 2007.
The allegedly downplayed figures allowed the firm to pay lower taxes when importing Marlboro and L&M cigarettes from Philip Morris in the Philippines, where these are manufactured, breaching Thailand’s 1926 Customs Act.
While DSI investigators forwarded the probe results to the OAG in 2009, advising them to lodge a complaint against those involved in the deception, the OAG failed to act for another four years.
Meanwhile, the Commerce Ministry reported to the DSI that Philip Morris (Thailand) had violated the 1999 Foreign Business Act as well.
“This is one of the extraordinary occurrences which take place in Thailand,” Dr Hatai said.
He blamed inaction and the absence of prosecution as a failure of public officials who let the issue drag on.
Dr Hatai said he would petition Prime Minister Prayut Chan-o-cha, asking him to look into the case so he could order the state agencies concerned to speed up investigations and bring about potential legal action against the culprits, as state money was involved.
Sukhothai Thammathirat Open University economics professor Suchada Tungthangthum said there were limitations with the DSI probe given it only examined the years 2003 to February 2007. Further investigation into later years could prove valuable, she said.
“In fact, the figure of lost tax revenue could be much higher than the 68 billion we are talking about,” she said.
Ms Suchada urged the Customs Department and other agencies, such as the Excise Department, to look into the matter. She said it was important to assess the Cost Insurance Freight (CIF) terms as declared by Philip Morris (Thailand).
Since a free trade agreement led to zero-duty imports from 2010 onwards, imported cigarettes are no longer subject to customs taxes but only to excise taxes, calculated on the basis of the CIF, she said.
By understating their products’ CIF, Philip Morris (Thailand) would be able to maintain its profits amid manufacturing cost increases.
Any potential false CIF declarations could lead to unfair competition between Thai manufacturers and foreign companies, she said.
Philip Morris (Thailand) told the Bangkok Post it would respond today to Dr Hatai’s remarks. Meanwhile, OAG spokesman Wanchai Rujanawong said prosecutors would report on their progress shortly.