The Philippines renewed its appeal before the World Trade Organization to compel Thailand to refund duties on cigarettes shipped from the Philippines.
This is the second request of the Philippines after a prior notice from the WTO advising Thailand to repay the taxes and duties it previously collected from Philippine Morris Philippines Manufacturing Inc. in a form of overtaxation nearly 15 years ago.
Philip Morris Philippines is the biggest cigarette exporter to Thailand selling popular brands like Marlboro and Philip Morris.
According to the WTO website, “a compliance panel has already been established in regards to the measures cited by the Philippines in its first request.” The request was circulated to WTO members on July 6, 2017.
The Philippines expects Thailand to respond to the request and and hold consultations within 15 days.
The WTO ordered Thailand to implement a fair valuation scheme on imported cigarettes brought in by Philip Morris Thailand from Philip Morris Philippines in the last 14 to 16 years and refund the excess tax collected by the Thai Customs Department.
The WTO Dispute Settlement Board has found that Thailand had been inconsistent with the General Agreements on Tariff and Trade 1994 and Customs Valuation Agreement.
Among Thailand’s inconsistencies to GATT included subjecting imported cigarettes to a value added tax liability in excess of that applied to domestic cigarettes, as well non-exemption to VAT when domestic cigarettes are VAT-exempt upon resale.
Thailand was also found to have failed to publish the methodology to determine tax base for VAT and administer the laws and regulations on customs valuation.
Thailand in 2011 lost the tobacco case filed by the Philippine government before the WTO in 2002 in behalf of the Philippine unit of Philip Morris.
Manila claimed that Bangkok slapped discriminatory taxes on cigarettes imported from the Philippines, but Thailand remained undeterred despite the world trade group’s recommendations.