UK link in crackdown on supercar tax evaders

*As many as 10,000 supercars may have been imported illegally, says DSI
* The BigChilli warned of trade back in April 2011 

SOME 160 models of the world’s most expensive cars were seized in May from showrooms in Bangkok and provinces by the Department of Special Investigation (DSI), working with the Customs Department, writes Maxmilian Wechsler.
    
The vehicles were appropriated following suspicion that their declared value was falsely reported to avoid Thailand’s high import duties.
    
The supercars include Lamborghini, Ferrari and Lotus. Most were imported from the United Kingdom because of the Brits, like Thais, drive on the left side of the road. The trade in luxury imported cars that are insufficiently taxed in Thailand is known as the ‘grey market’. Warnings about this illegal market were voiced by authorised dealers in an article in the April 2011 issue of The BigChilli. (see Editorial, page 6)
    
The DSI raids were the culmination of a lengthy investigation that began when a trailer truck transporting six luxury cars caught fire on Mitraphab Road in Pak Chong district of Nakhon Ratchasima province in May 2013. Four of the cars, a BMW, Lamborghini, Ferrari and Bentley, were completely destroyed in the fire. The driver of the truck said the cars were being delivered to an unknown recipient in Si Sa Ket province. The gutted cars were worth around 100 million baht.
    
DSI investigators discovered that all six vehicles had been partially disassembled before export to Thailand to avoid the heavy taxes and then reassembled locally. In Thailand, supercars are classified as luxury, high-performance sports cars costing eight million baht or more.

Soon after the well-publicized trailer-truck fire, Thai authorities seized 120 luxury cars throughout Thailand which was suspected to have been illegally imported.
    
The raids in May this year were the result of the same ongoing investigation. The seizure of the cars from the showrooms was widely reported abroad, especially in the UK.
    
During a press conference after the 122 cars had been impounded, DSI Director-General Pol Col Paisit Wongmuang pledged that the DSI would continue to closely track imports and sales in the luxury car sector and press charges against those who break the law. He also said that the DSI’s investigation into the alleged tax evasion scheme indicated that up to 10,000 supercars may have been imported illegally, adding that all cases would be investigated to determine if the required taxes were paid.
    
Noppadol Rattanasathien, a DSI specialist said that his organisation had already checked into the import of 7,123 cars and found that 3,773 were illegal.
    
The Guardian recently reported that Thai investigators had uncovered an array of loopholes that dealers and corrupt customs officials exploit to “circumvent eye-watering taxes” Thailand places on supercars – usually amounting to around 328 percent of list price. The newspaper said that in the vast majority of cases the dealers under-declared the true value of the cars in order to save on duty fees, and added that some 30 car import businesses were being investigated.
    
The DSI revealed it has been working closely with Britain’s National Vehicle Crime Intelligence Service. According to the agency, as of June 22 this year, 38 supercars stolen in the UK had been exported to Thailand. The vehicles were identified by their engine and chassis numbers. Pol Col Paisit said that Thai authorities are also coordinating with automobile manufacturers abroad.
    
Nine Customs Department officers, including two former deputies of the director-general of the department, were complicit in a scheme to import luxury cars under false pretences to avoid paying higher taxes, according to the Bangkok Post quoting the DSI.
    
“The Office of the Auditor-General looks set to take legal action against nine custom officials who were [allegedly] involved in forging invoices so that the price of these products [luxury vehicles] could be falsely declared below their true price,” the Bangkok Post quoted DSI deputy chief Pol Lt-Col Korawat Panprapakon as saying.

The Nation reported on June 13 that according to a source 108 Customs officials are under investigation in relation to the grey market car trade. The report said the anti-graft National Anti-Corruption Commission was waiting for more documents from British authorities.
    
Tax scams involving luxury cars in Thailand take billions of baht out of the public coffer and only benefit criminals. Importers of supercars are allegedly backed by wealthy, influential people who feel little pressure to play by the rules.
    
The DSI has been living up to its pledge to crack down on this white-collar crime and hopefully, it will continue in the effort to stop greedy people from cheating the country out of much-needed revenue.
 
Less muscle on display

A recent visit to several dealers’ showrooms that normally have supercars on display in Bangkok – one of them is located close to the DSI headquarters – revealed that most dealers had replaced their ultra-expensive cars with much less prestigious brands.
    
Some showrooms with a large floor space had only one or two less costly cars on display instead of the top-of-the-line muscle cars they used to show.
    
Owners who have shelled out a lot of money for a supercar are now worried that they could face problems if the car was stolen abroad or tax fraud was committed. The VIP car park on the ground floor of the Siam Paragon continues to be filled to capacity in the evenings, but according to one observer,  there are a noticeably fewer Lamborghinis, Ferraris and Bentleys to be seen since the DSI raids.