Indonesia: INDEF sings tobacco industry tune
Bangkok: Thai Attorney-General takes Philip Morris to court over tax evasion

Indonesia: INDEF sings tobacco industry tune

Since INDEF (Institute for Development of Economics and Finance) signed an MOU with US research institute, ITIC, which is funded by the tobacco industry, they are hooting for the tobacco industry. INDEF is publically declaring their support for the pro-tobacco industry bill currently being debated in Parliament.

The public health community was concerned when ITIC formed a partnership with INDEF last year. The reason is simple – the ITIC is fronting the tobacco industry in Asia. Now, its new Asian partner, INDEF, is pushing pro-tobacco industry positions – even in Parliament.

INDEF has also already made press statements that an increase in excise tax will trigger illicit trade in cigarettes – same fear propagated by the tobacco industry. It has also asked the government to accommodate both the interests of the state and the interests of cigarette producers and find a balance.

In 2015, INDEF and the International Tax and Investment Center (ITIC) signed an agreement to cooperate on joint programs in Indonesia and in the ASEAN. Among the first ITIC-INDEF joint activity was the launch of ITIC’s Indonesian version of the ASEAN Excise Tax Reform: A Resource Manual,which contains contradictions and inconsistencies on tobacco tax when compared against international best practices.

The International Tax and Investment Center, ITIC, is a Washington DC based institution whose sponsors include the major transnational tobacco companies, Philip Morris International (PMI), British American Tobacco (BAT) and JT International (JTI). The ITIC has conducted research on illicit tobacco trade in Asian countries in 2013 and 2014 funded by PMI. For more information on these research institutions click here.


Bangkok: Thai Attorney-General takes Philip Morris to court over tax evasion

The Office of the Attorney-General (OAG) has filed a multi-billion-baht lawsuit against Philip Morris Thailand (PMTL) in the Criminal Court on charges of tax evasion, according to a Bangkok Post report. Two years ago, in October 2013, the then attorney-general had decided to indict the company, its executives and staff. That decision is being carried out now.

The OAG has charged PMTL for allegedly under-reporting the value of cigarettes it imported from the Philippines between 2003 and 2006 to avoid paying the full amount of tax worth 20 million baht ($551.27 million). The company declared an amount of 5.88 baht for a packet of L&M cigarettes from the Philippines, while other cigarette importers declared 16.81 baht per packet.

The court accepted the lawsuit and called the plaintiff and defendants to a meeting on April 25. The defendants are PMTL, its branch manager and seven Thai employees.

If found guilty of the offence, there is a fine worth four times the amount, or about 80 billion baht, (US$2.2billion). The case also carries a punishment of a maximum jail term of 10 years. The defendants are among 14 parties who the Department of Special Investigation earlier charged over the case.

For information on TI denormalization, check out SEATCA’s TobaccoIndustry Watch website

Previous ASEAN Tobacco Watch updates can be found here