Mighty gets chance to air side on tax evasion charge

The government was giving domestic cigarette manufacturer Mighty Corp. a chance to explain why its factory should not be shut down despite allegedly dodging billions of pesos in tax payments, Finance Secretary Carlos G. Dominguez III said.
Also, amid reports that multinational tobacco firm British American Tobacco was set to buy into Mighty because of its distribution network, Dominguez said the government would still continue to run after unpaid taxes from alleged use of fake tax stamps.

“I believe they [the Bureau of Internal Revenue] have asked Mighty to explain why they shouldn’t be cancelled,” Dominguez said, referring to the BIR’s plan to cancel the firm’s license to operate, a form of penalty slapped on alleged tax evaders under the Tax Code.

“[The BIR] already sent a notice [to Mighty] a couple of weeks ago saying [the company should] answer within 15 days because that’s the due process. We told them we found this thing wrong, [so] tell us why we should not cancel your license to manufacture. Then they answered all kinds of things. So we have to answer again. That’s the due process,” Dominguez said.

“We have to follow the due process. Otherwise, our case may be thrown out of court. So we have to follow it diligently,” the Finance chief added.

The BIR already filed three tax evasion cases against Mighty for alleged use of counterfeit tax stamps, which means the company did not pay the correct excise taxes under the Sin Tax Reform Law.

As for a potential buyer in Mighty, Dominguez said that for the part of the government, “our partnership with them is still the same—they are taxpayers and we have a big suspicion that they haven’t been paying the taxes that they should, so we will continue to investigate and continue to file [cases] if there is any finding that they have not been paying taxes.”

Dominguez said any potential Mighty buyer such as BAT had yet to talk to the Department of Finance on how to push through with the acquisition despite the pending cases being faced by the cigarette firm.

“They haven’t talked to us about the legal cases of Mighty… Maybe they have their own plans which at this point I’m not really too aware of. But I’m sure, if they have anything concrete at some point in the future, they may want to talk us, seriously and officially,” Dominguez said.