A STUDY OF TAX EVASION ROUTES AND INSIGHTS INTO CROSS-BORDER ILLEGAL OIL SMUGGLING IN THE THAILAND - MALAYSIA BORDER AREA

Abstract

This qualitative research aimed to examine the tax-evading trade routes involved in illegal transnational petrol smuggling at the Narathiwat Province border between Thailand and Malaysia, and explore the attitudes of illegal traders engaged in transnational petrol smuggling in the same border area. The sample consisted of 90 participants, including 30 illegal petroleum sellers and 60 customers involved in the illegal purchase of petroleum products. Convenience sampling was used in conjunction with purposive sampling. Participant observation and structured interviews were employed as data collection methods, and the data were recorded in written form. The data were analyzed using frequency, percentage, and content analysis.

The findings indicate that illicit fuel smuggling is conducted through both land and water routes. These routes can be classified into four categories: permanent border checkpoints (customs houses), temporary border checkpoints, trade facilitation points, and natural crossing points. Most sellers acknowledge that their activities constitute tax evasion; however, they lack adequate knowledge of the relevant legal provisions and perceive that selling illicit fuel generates higher income than their regular employment. Meanwhile, buyers justify their purchases based on lower prices, convenience, and easy accessibility, with the majority being unaware of the applicable legal regulations. In terms of impact, such smuggling results in government revenue losses from import duties, excise taxes, and fuel funds; distorts market mechanisms; creates unfair competition; and may contribute to the normalization of unlawful practices within local communities. Furthermore, the geographical characteristics of the border area, along with its economic and social context, increase vulnerability to these activities, thereby directly linking the issue to national security concerns. The findings highlight the need for integrated measures that combine legal enforcement, economic policy reforms, and border area development strategies to effectively prevent and sustainably reduce transnational fuel smuggling.