Stop ‘Fronting’ for Tobacco Companies, Government Urged

“There is a powerful consensus among health advocates and public officials worldwide that multinational tobacco companies, such as Philip Morris International, have been using their political and economic influence to weaken, delay and defeat tobacco control effort around the world,” Limpin noted.

In Aquino’s complaint before the WTO, the Philippine government claimed that Thailand violated WTO rules by setting higher customs values for Philippine cigarettes, which are the basis for calculating customs duties, and by raising maximum retail selling prices on imported cigarettes, the basis for assessing value-added taxes (VAT).

The dispute arose in August 2006 when Thai authorities disregarded declared transaction amounts and charged higher duties, suspecting that exports from Philip Morris’ plant in Tanauan, Batangas were undervalued.

Thailand suspected that since the cigarette exporter, Philip Morris Philippines Manufacturing, Inc., and the importer, Philip Morris Thailand, are related parties, the declared prices may have been artificially low to reduce tax payments.

“The Thai government has the right to impose measures to protect their people against the dangers of smoking. The Philippine government should do the same thing as the Thai government did – raise the taxes of local and imported cigarettes to effectively protect the health of its constituency,” Limpin said.

Thailand has one of the highest excise taxes on cigarettes among the ASEAN nations. The tobacco control community lauds its efforts in protecting its populace from the harms of tobacco through price measures such as tax increases. (END)

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