THE Department of Finance (DOF) said some P30 billion, including value-added tax (VAT), may be collected from Mighty Corp. should the government approve the settlement offer of the homegrown tobacco firm on its tax liabilities.
But according to Finance Secretary Carlos G. Dominguez III, should the government approve the settlement offer, criminal charges may still be filed by the Bureau of Internal Revenue (BIR), as the matter is not subject to a compromise.
“If we accept, the total tax is around P30 billion, slightly in excess of P30 billion. [The] criminal cases cannot be compromised,” Dominguez told financial reporters.
On Thursday the DOF received P3.44 billion from Mighty Corp. as initial payment for its tax liabilities. The finance chief reiterated the DOF will receive the initial payment representing a portion of Mighty Corp.’s tax liabilities but said the receipt should not be taken as a settlement offer.
Japan Tobacco International (Philippines) Inc. (JTI) issued last Thursday a manager’s check for P3.44 billion that covered Mighty Corp.’s excise-tax liabilities, with the balance of P21.5 billion to be paid on or after the proposed deal with JTI is sealed.
Dominguez also said the finance minister and deputy prime minister of Japan wrote him a letter in May asking him to meet with officials from JTI.
“They [the Japanese finance minister and deputy prime minister] wrote me a letter asking me to talk to the JTI people. I did. You know, when your colleague or counterpart asks you to do something, of course, you do it. So I said yes, we will meet with the JTI guys,” he said.
Earlier, in a letter sent to BIR Commissioner Caesar R. Dulay dated July 10, Mighty Corp. offered to settle its tax liabilities amounting to P25 billion, representing deficiency excise tax of P3.5 billion and the internal-revenue tax of the manufacturer and its shareholders amounting to another P21.5 billion.
In March the BIR filed a P9.56-billion tax-evasion charge against Mighty Corp. before the Department of Justice (DOJ) over the company’s reported use of fake tax stamps. It was also charged for unlawful possession of articles subject to excise tax and for possessing false, counterfeit, restored or altered stamps in violation of Sections 263 and 265 (c) of the National Internal Revenue Code of 1997.
The Bureau of Customs (BOC) and the BIR estimated revenue losses for nonpayment of excise taxes amounting to P1.1 billion, based on the value of the seized products. The operation in Zamboanga City yielded 400 master cases of counterfeit smuggled cigarettes, with an estimated street value of P13.5 million. For the raid in General Santos City, the authorities seized 11,044 master cases of assorted cigarettes, with approximate street value of P215 million. In the Pampanga raid, 62,000 master cases, containing over P1.957 billion worth of assorted cigarettes, were seized.