Toyota, Isuzu get big back-tax bills

Toyota, Isuzu get big back-tax bills

The Customs Department has sought 13.46 billion baht in additional tariffs and taxes from Toyota Motor Thailand Co and Isuzu Motors Co (Thailand) on parts imports for their assembly lines in Thailand.

The department has sent Toyota a bill to collect 11.67 billion baht more for parts imported from Japan between 2010 and 2012 for the production of its Prius hybrid car in Thailand based on 224 invoices, said Somchai Sujjapongse, the department’s director-general.

Of the amount, 7.6 billion baht was import duty, 2.02 billion baht excise taxes, 1.82 billion baht value-added tax (VAT) and 216 million baht local tax.

In 2012, the department sent a notice to the company seeking the extra payments but the company appealed the decision. The final ruling was made recently that the automaker had to pay the additional taxes.

The Toyota decision hinged mainly on an interpretation of a clause in the free trade agreement between Thailand and Japan.

Under the pact, carmakers who receive approval before importing components for completely knocked-down (CKD) vehicles pay a 30% tax rate on the parts. Toyota assembles Prius cars at its factory in Chachoengsao.

The department maintained that Toyota was subject to an 80% tariff on fully imported vehicles since it did not seek approval. 

Mr Somchai said Isuzu also had to pay 1.795 billion baht more for the imports of transmission sets from the Philippines between 2000 and 2002. While the purchases were entitled to a tariff cut to 5% from 42% under the Asean Industrial Cooperation Scheme, the import value exceeded what was allowed.

Isuzu will therefore have to pay 624 million baht for the shortfall plus 43 million baht in VAT. It must also pay an additional duty of 1.04 billion baht, 43 million baht in VAT, and another 43 million for the VAT fine.

Mr Somchai said the department had collected a total of 58.99 billion of import duty in the first half of fiscal 2015, starting Oct 1, 2014. The collection was 4% lower than the target of 61.5 billion but 0.28% higher year-on-year.

The department, meanwhile, is forecasting that it will collect 117.825 billion baht in import duties for fiscal 2015, about 3.73% below the target of 122.4 billion, due to unfavourable economic conditions.

The department will try to increase the efficiency of duty collections and speed up public auctions of seized products.

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