ALLEGATION AGAINST PHILIP MORRIS "HARD TO PROVE"

       Customs officer Yuttana Yimkarun admitted yesterday that it was difficult to prove if tobacco giant Philip Morris (Thailand) had understated the price of cigarettes to keep its excise-tax payments low.
       He noted that, in practice, the Customs Department accepts prices stated by importers and makes comparisons later on. However, he said, it was difficult to compare prices because Philip Morris (Thailand) was the sole importer and distributor of Marlboro and L&M cigarettes.
       His comment followed the Department of Special Investigation's declaration that Philip Morris (Thailand) had understated the cost, insurance and freight price of the products imported from the Philippines. The DSI said that by doing this, Philip Morris had evaded
       tax payments worth Bt69 billion. The DSI named 14 parties in the case, and the Office of the Attorney-General will decide on October 2 on whether it should launch a court proceeding.
       "If the cost is deemed to be higher, the DSI has to prove that the stated prices are too low," he said, adding that it was inappropriate for the DSI to compare the stated prices with retail prices in duty-free shops.
       He added that in 2000 the Customs Department had accused the company of understating the price and the issue was resolved later. The stated price then was higher than the current rate, he added.
       Since 2000, Philip Morris has been stating a lower price, saying that it was the actual cost in line with the General Agreement on Tariff and Trade (GATT), he said.
       Philip Morris (Thailand) has also filed a petition with the International Court of Justice in the Hague against the Customs Department's requirement for an increase in the stated price as well as the price disclosure rules. It said this was a sort of protectionism under the World Trade Organisation rules.