BIR, BOC challenged to bring in big tax cheat after Mighty success

The Department of Finance (DOF) wants the country’s two biggest revenue agencies to catch another big-fish tax evader after the government collected P30 billion from homegrown cigarette manufacturer Mighty Corp. last year.

In a statement on Wednesday, the DOF said the amount was, to date, the largest sum raised by the government from a tax settlement, attributing it to “a heightened joint campaign by the bureaus of Internal Revenue (BIR) and of Customs (BOC) against tax cheats.”

Last year, almost 120 million packs of Mighty cigarettes were found bearing fake cigarette tax stamps to evade excise payments. The government subsequently filed three tax evasion cases worth nearly P38 billion against the Bulacan-based firm.

The parties agreed to a settlement, forcing Mighty to sell P46.8 billion in assets to global tobacco giant Japan Tobacco International (JTI). JTI will thus pay the government a total of P30 billion—P25 billion for the settlement on top of P5 billion in value-added tax—until April this year.

“Every month for the first three months since JTI took over Mighty in September 2017, collections from the Mighty operations of JTI have increased by an average of P2.5 billion a month,” Finance Secretary Carlos G. Dominguez III said.

Dominguez said he was hopeful that “the closer coordination between the BIR and BOC, which was a key factor in the success of the campaign against Mighty, would yield another big-time tax cheat in 2018.”