The country’s biggest organization of local manufacturers has called on President Duterte to “apply tax laws to all” as they expressed concern over a supposed plan to settle the arrears of homegrown cigarette maker Mighty Corp. due to its use of fake tax stamps.
“The war on illicit trade is not about personalities, nationalities, company size and market dominance. It is about the full implementation of Philippine tax and criminal laws, upon which those who violate these laws must be punished, regardless of company size and the nationalities of those involved in it,” said Federation of Philippine Industries chair and Fight Illicit Trade (Fight IT) convenor Jesus L. Arranza.
“I am confident that the President will take into account the provisions of the National Internal Revenue Code, which provides that the amount of settlement should not be less than 10 times the amount of taxes being evaded. For sure, he will put in place conditions to prevent the occurrence of the same offense in the future,” Arranza pointed out.
According to Arranza, the government’s campaign against illicit trade must not be sidetracked by such insinuations, stressing that there were laws and legal options for all those suspected to be involved in the proliferation of fake tax stamps.
“Let us leave it to the courts to evaluate the merits of the complaints filed or to be filed against those involved in the illicit trade of tobacco. Hence, let us stop this public relations campaign as it will only confuse the issues especially when this is trying to depict a battle similar to that of David and Goliath,” Arranza said, referring to a supposed spin that this issue was just about a supposed battle between multinational cigarette giants and the Bulacan-based manufacturer.
Arranza also commended the Duterte administration for its “real and determined” campaign against illicit trade, which he said was a big scourge to the country’s economy.
“Billions of pesos are lost each year by the government to illicit trade affecting several crucial government projects,” Arranza noted. “There is no cigarette war. But there are tax laws to be followed by all companies doing business in the country, regardless of its size, market control and nationalities, if only to raise much-needed revenues for the government to finance its various projects. These laws provide the tariff rates for both locally manufactured and imported cigarettes.”
Last Friday, Finance Secretary Carlos G. Dominguez III said the tax-evasion case being readied against Mighty would definitely push through while the government computes all of the company’s unpaid excise taxes.
Last week, President Duterte said the government might instead settle with Mighty if the cigarette firm would pay P3-5 billion. However, Dominguez said “there will be no settlement.”
Dominguez said the Department of Finance and the bureaus of Customs and of Internal Revenue have yet to determine Mighty’s total unpaid excise taxes, although he said in a speech that it could be at least P5 billion.
Nongovernment Action for Economic Reforms had pegged Mighty’s tax liabilities at about P15 billion based on the volume of cigarette packs that bore fake stamps earlier confiscated by the BOC and the BIR in Zamboanga, Pampanga, General Santos City, Cebu and Tacloban City.
“We’re still counting. We’re having a bit of difficulty counting,” Dominguez said, pointing out that Mighty’s lawyers were “obstructing” the investigation of the BOC and the BIR. “But we’re going to be determined to get the [total] amount [of Mighty’s arrears]. We’re moving quickly to lift the TRO (temporary restraining order) [obtained by Mighty against the BOC]. We have discussed it with the executive secretary and the justice secretary. We will [contest it] up to the Supreme Court,” Dominguez said.