Thailand’s Criminal Court on Nov. 29 fined Philip Morris (Thailand) THB1.2 billion ($39.63 million) for evading taxes.
Filed by the Office of the Attorney General (OAG) in January 2016, the lawsuit charged Philip Morris with evading taxes by under-declaring the value of cigarettes it imported from the Philippines from 2003 to 2006.
According to the OAG, Philip Morris set the price of imported L&M cigarettes at THB5.88 while other importers declared the same brand of cigarettes at THB16.81 per pack. The firm also declared the cost, insurance and freight rate on Marlboro from the Philippines at THB7.76 per pack, lower than the THB27.46 reported by other importers.
The under-declaration cost the government more than THB20 billion in tax collections, according to the complaint.
Philip Morris denies the charges.
Gerald Margolis, Philip Morris International’s managing director for Thailand and Indochina, said the company will appeal the case, citing an earlier World Trade Organization ruling that Philip Morris (Thailand) had followed Thai laws related to prices and import tax declaration.