The government is still studying whether or not to accept the settlement being offered by homegrown cigarette maker Mighty Corp. for its excise tax deficiencies, although Finance Secretary Carlos G. Dominguez III admitted it could be a “good deal.”
Dominguez told a press briefing Friday that the Department of Finance has yet to formally approve Mighty’s proposed tax settlement amounting to P25 billion, which will be partly funded by the P45-billion sale of its assets and distribution network to Japan Tobacco International Philippines.
“Basically, it seems like a good deal,” Dominguez said.
Last week, the DOF—through the Bureau of Internal Revenue—accepted an initial P3.44-billion payment from Mighty and JTI Philippines. “Of course, if somebody will come up and give us P3.44 billion, we will not say no,” the finance chief said.
Industry sources said the signing of the memorandum of agreement for the sale of Mighty to JTI Philippines last Thursday was precisely timed ahead of President Duterte’s State of the Nation Address today. Sources claimed the President would possibly announce the government’s acceptance of Mighty’s tax settlement in his speech.
Dominguez nonetheless said President Duterte’s approval need not be secured before a tax settlement could be entered into by the government as such power was with the BIR commissioner.
The finance chief said the government “will take our time to study the matter,” although he was firm that “criminal cases cannot be compromised.”
In all, Mighty and its officials had been slapped three tax evasion cases for a total of P37.9 billion in unpaid excise taxes due to its alleged use of fake tax stamps to dodge payments.
Referring to the cases against Mighty, Dominguez said: “The coordination between the Bureau of Customs and the BIR had yielded us potentially the largest ever collection of taxes from any individual at one time in Philippine history. And that is because the teamwork is going well, [so] we have been able to nail a real big fish.”
Dominguez said they expected to collect up to P30 billion, including value-added tax (VAT), from a potential settlement with Mighty.