Back tax demand stuns industry

"It's not fair to us when the Customs Department claims some reason to change the tariff rate arbitrarily," a source in the electric and electronics industry said.

This problem has persisted for decades, he said.

"The red tape makes foreign investors hesitate to set up here, because they may face additional costs, which is not reasonable," he said.

And 55 per cent of the back taxes and fine will go to customs officials instead of the government, he said.

"They'll receive 25 per cent as a reward for the information and 30 per cent as a reward for information that led to actual confiscation. The country should stop giving such rewards, because they induce officials to behave improperly," he said.

Six large manufacturers of transformer equipment and electrical appliances have not paid back taxes and penalties worth over Bt3 billion to the Customs Department since it changed the department's harmonisation rule, whereby the 1-per-cent duty on steel containing less than 0.6-per-cent silicon was revised to 12 per cent in 2003.

The six companies are United Coil Centre, Bangkok Pacific Steel, Thai Sumilox, Siam Steel Service Centre, Sanyo Universal Electric and Siam Compressor Industry.

Members of the Electric and Electronic Industry Club under the Federation of Thai Industries plan to petition the Finance Ministry for transparent practices for manufacturers.