Manila counts on Mighty to solve tax shortfall
THE PHILIPPINES’ Department of Finance expects the 30 billion pesos (Bt19.8 billion) that the Bureau of Internal Revenue would collect from cigarette manufacturer Mighty Corp’s proposed tax settlement will help “wipe out” the government’s below-target revenue collections.
Also, Finance Secretary Carlos Dominguez said in a statement that the government’s full collection of Mighty’s civil settlement of its tax liabilities would depend on how swiftly the Philippine Competition Commission (PCC) could approve the sale of the home-grown cigarette company’s assets to Japan Tobacco International (JTI).
“This will be the largest sum of taxes collected ever from a single taxpayer in Philippine history. The date of full collection will depend on how fast the PCC approves the sale of Mighty’s assets to JTI, whose largest shareholder, incidentally, is the Japanese government,” he said.
As such, Mighty would be out of the cigarette manufacturing business from now on, the finance chief added. The BIR has filed at the Department of Justice three tax evasion cases against Mighty and its top executives for a total of 37.9 billion pesos in unpaid excise taxes due to the alleged use of fake tax stamps.
Last Friday, Dominguez said the Department of Finance has yet to formally approve Mighty’s proposed tax settlement amounting to 25 billion pesos, which would be partly funded by the 45-billion pesos sale of its assets and distribution network to JTI Philippines.