Gov’t sees P24B in revenues from taxes on Mighty products
The Department of Finance expects up to P24 billion in revenues yearly from taxes slapped on sales of Mighty products under the new ownership led by Japan Tobacco International’s Philippine unit.
Citing Bureau of Internal Revenue (BIR) estimates, Finance Secretary Carlos Dominguez III said “sin” tax collections from Mighty products moving forward had been estimated at P40 million a week or nearly P2 billion a month.
“The additional estimate is only from the beginning. Obviously, the new owners of the brand and the new manufacturers have not yet geared up their marketing, so if they are able to sell more, of course, that amount will increase,” Dominguez told reporters last week.
Early this year, Mighty cigarettes had been found bearing fake cigarette tax stamps such that the government slapped the homegrown manufacturer three tax evasion cases worth almost P38 billion.
The government eventually decided to settle with Mighty, under which the Bulacan-based firm had to sell P46.8 billion in assets to JTI.
Mighty was the second-biggest cigarette manufacturer in the country after PMFTC Inc., the joint venture of tycoon Lucio Tan’s Fortune Tobacco and global giant Philip Morris International.
“When we went after Mighty cigarette, number one, we gained a one-time collection of P30-billion total including the VAT (value-added tax). Secondly, it looks like from their initial estimates we are going to get another P24 billion a year, at least. And that’s every year assuming that the demand is just steady. So it’s not a bad deal,” Dominguez said.
Last Friday, the Department of Justice dismissed the tax evasion cases against Mighty owner Alexander Wongchuking, 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 said, adding that “the government of the Philippines is now P40-billion richer, including [surcharges].” —BEN O. DE VERA
