Chalerm hits PM over cigarette 'tax evasion'

During the no-confidence debate, Chalerm alleged that Prime Minister Abhisit Vejjajiva had instructed Kiat Sitthiamorn, president of the Office of Thailand Trade Representative, to facilitate the evasion in October 2009.

Citing an official document that he presented in Parliament, Chalerm accused the premier and Kiat of interfering in the investigation into alleged tax evasion by Philip Morris Thailand (PMT).

PMT earlier faced possible tax liability of as much as Bt68 billion for under-declaring the value of its imported cigarettes under the brand names Marlboro and LM.

While the investigation was underway, Chalerm said Kiat chaired meetings of top officials from the Customs, Excise and Revenue departments as well as the Department of Special Investigation and the Office of the Attorney General in late 2009 to help PMT, resulting in the public prosecutors' decision not to press charges against the US firm.

According to the opposition MP, the government's actions came ahead of a World Trade Organisation (WTO) decision on August 4, 2010, which said Thailand's tax-calculation method in the PMT case ran counter to its rules.

Thailand recently lodged an appeal with the WTO.

Chalerm said it was unconstitutional for the prime minister to interfere in the investigation and justice process involving a potential tax liability of Bt68 billion.

Chalerm also alleged this was evident when the Office of the Attorney General was asked to review its decision on the case.

He said the potential liability could exceed Bt100 billion when other fines were included, with the government allegedly helping foreign companies to dump cheap cigarettes into the Thai market.

PMT's products have a market share of as much as 30 per cent in Thailand but they have not been taxed properly, Chalerm said.

Government officials said earlier that the Bt68-billion figure was based on multiplying the number of cigarette packs imported by PMT in 2006 by Bt20. The latter figure came from the price difference between cigarette packs imported by duty-free firm King Power and the prices declared by PMT.