The Philippines’ tiff with Thailand over its tax system takes on a new twist as a Thai court fined the local unit of Philip Morris 1.2 billion baht ($40 million) for under-declaring the value of cigarettes it imported from the Philippines.
That issue sparked a protracted trade dispute between Manila and Bangkok to which the World Trade Organization (WTO) sided with the former.
Thailand has yet to comply with the ruling.
Sought for comment, Ramon Lopez, secretary of the Department of Trade and Industry (DTI), said he will have the ruling studied by the agency.
A Reuters report from Bangkok said the Thai public prosecutor filed charges in 2016 against Philip Morris Thailand and seven of its Thai employees, alleging under-reporting of the value of more than 270 entries of imported cigarettes from the Philippines between 2003 and 2006 which led to revenue losses of more than 306 million baht.
The Philippines went to the WTO in 2008 to complain that Thailand was illegally discriminating against imports to protect its state-controlled Thailand Tobacco Monopoly.
A 2010 ruling of the WTO said Thailand had no grounds to reject the import price of cigarettes from the Philippines and asked Bangkok to fix its tax system as it discriminated against imports.
The Philippines has said that a series of domestic taxation and customs valuations by Thailand that started in 2006 undermined the competitiveness of its cigarettes against those produced by Thailand Tobacco Monopoly.
Even after a series of appeals by Bangkok before the dispute settlement body, the WTO affirmed the earlier ruling to which the Thai government is yet to comply.
Lopez in an earlier interview said due to Bangkok’s refusal to heed the decision, the DTI plans to seek compensation in the form of higher levies on cars coming from Thailand.