It would not name the importers, but sources said they held 90 per cent of the market and imported up to 440 million packs of cigarettes last year.

At a meeting yesterday with representatives from the Excise, Revenue and Customs departments, DSI director-general Police General Sombat Amornwiwat said investigators found the importers had been under-declaring their cost, insurance and freight (CIF) to avoid paying taxes worth more than Bt100 million.

He said it would take about a month to force the companies to pay the tax, and then the government would be asked to start collecting cigarette taxes based on the sales price and not the cost.

Sombat said it was believed false declarations about the imported cigarettes had been going on since 2000 when the GATT tax system was implemented.

The DSI is expected to take up to one month to gather evidence for the case. It will then call the cigarette companies in to explain their actions, Sombat said, adding if government officials were involved they would face severe punishment.

He said department officials would gather information from other Asean countries to get a better understanding of how the situation arose, adding two importers had been bringing cigarettes in from Malaysia at vastly different prices.

A source said the declared price of cigarettes was made according to the supplier, labour wages and tobacco leaf prices, as well as the grade of cigarette ingredients, and that might explain the cost differences between the companies.