DOJ: ‘Gov’t now P40B richer’

A guard keeps watch outside the Mighty Corp. compound in Makati City on the day the company, facing tax evasion charges, entered into a P40-billion settlement with the government. —LYN RILLON

Case closed.

Mighty Corp. owner Alexander Wongchuking has skirted criminal indictment after he entered into an out-of-court settlement with the Bureau of Internal Revenue (BIR) over the P38-billion tax evasion case filed against him and three other executives of the homegrown cigarette maker.

This prompted the Department of Justice (DOJ) to toss out the three separate complaints for tax evasion brought against Wongchuking, Mighty president Edilberto Adan, executive vice president Oscar Barrientos and treasurer Ernesto Victa.

“Under our tax laws, settling a tax case is allowed. We could consider this case as closed,” Justice Secretary Vitaliano Aguirre II told reporters on Friday.

“The government of the Philippines is now P40 billion richer, including (surcharges),” Aguirre added.

Joint resolution

In a joint resolution dated Oct. 2, a three-member panel of DOJ prosecutors headed by Senior Assistant State Prosecutor Sebastian Caponong Jr. granted the Sept. 26 motion of the BIR that sought to withdraw the criminal cases against the officials of Mighty.

The state prosecutors said Section 24 of Republic Act No. 8424, or the National Internal Revenue Code, allowed BIR Chief Caesar Dulay to “compromise, abate and refund or credit taxes, and to compromise criminal violations except those already filed in court or those involving fraud.”

“[Considering] further that the parties to the instant are not opposed to the prayer for the withdrawal of the complaints, it behooves (the DOJ) to grant the motion if only to promote greater interest of the parties involved,” read a portion of the two-page resolution.

President Duterte had earlier threatened to order Wongchuking’s arrest for allegedly avoiding the payment of correct taxes, saying the Mighty owner should pay at least P3 billion to the government.

The tax cases forced Wongchuking to sell his company—the country’s No. 2 cigarette manufacturer—to international cigarette giant Japan Tobacco, Inc.

Terms of settlement

The Duterte administration had accused Mighty of using counterfeit tax stamps to avoid paying P37.88 billion in taxes.

However in July, President Duterte ordered the finance department to accept a settlement, under which Mighty, which had 23 percent of the local cigarette market, would drop out of the tobacco business.

The company settled the case with a P30-billion payment and paid another P10 billion in taxes and penalties, he explained.

Mighty had originally offered a 25-billion-peso settlement, Aguirre added.

The Japanese firm, whose global brands include Winston and Camel, announced last Aug. 22 that it was purchasing Mighty for P46.8 billion. —WITH A REPORT FROM AFP