Tax deal with Mighty dims

Mighty cigarette products kept in San Simon warehouse in Pampanga. CONTRIBUTED PHOTO

If you ask the Department of Finance, it will not settle the tax evasion case with Mighty Corp. despite President Duterte’s proposal to instead get settlement money from the homegrown cigarette manufacturer.

“The latest inspections done in Bulacan, for instance, would help the government build a strong case against Mighty. Any settlement is now out of the question until the courts say so,” Finance Secretary Carlos G. Dominguez III said yesterday.

Dominguez was referring to the raid conducted by the Bureau of Customs at two of Mighty’s warehouses in Bulacan last Friday, in which P3.2 billion worth of cigarettes were found affixed with counterfeit tax stamps.

The unpaid excise taxes from the cigarette packs bearing fake stamps seized by the BOC were estimated at P2.4 billion.

Also last week, the Bureau of Internal Revenue filed a P9.56-billion case against Mighty, one of the biggest tax evasion cases in the country’s history.

Sources claimed that since last week’s tax evasion charges covered only the raid in Pampanga, another case would likely be filed against Mighty while the BIR looks into possibly suspending the company’s license to manufacture.

Albay Rep. Joey Sarte Salceda had said that Mighty’s basic arrears could reach as much as P25 billion, excluding interest and penalties for nonpayment of excise taxes.

Nongovernment group 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 City, Pampanga, General Santos City, Cebu City and Tacloban City in late February and early this month.

“We commend the BOC, the BIR, as well as other agencies such as the Philippine National Police for remaining relentless in their joint campaign against tax fraud,” Dominguez said.

“The close cooperation we are now seeing between the BIR and the BOC against those who continue to undermine our reform agenda is the kind of teamwork we need in government. Their sustained operations against illegal activities demonstrate the Duterte administration’s firm resolve to expose tax cheats and bring action against them in court,” Dominguez added.

Specifically, the sustained inspections done by the BOC and BIR on warehouses suspected to be storing cigarettes with counterfeit tax stamps were necessary to expose suspected tax dodgers and demonstrate the government’s resolve to hail them to court, according to Dominguez.

Also, Dominguez welcomed the Manila regional trial court ruling last week that junked Mighty’s request for a preliminary injunction against the BOC’s raids on its warehouses.

According to the DOF, the court’s rejection of the plea paved the way for the BOC and the BIR to continue inspecting warehouses storing cigarettes manufactured by Mighty, including the facilities earlier raided by government operatives in San Simon, Pampanga.