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Friday, April 19, 2024

P9.5-b tax case vs Mighty

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THE government on Wednesday filed a P9.564-billion tax evasion case against the owner of the cigarette company Mighty Corp. and its officials for allegedly using counterfeit tax stamps to avoid paying excise taxes. 

In a complaint filed by the Bureau of Internal Revenue, owner Alexander Wong Chu King, company president Edilberto Adan, executive vice president Oscar Barrientos, and treasurer Ernesto Victa of violating sections of the National Internal Revenue Code of 1997.

Senior Assistant State Prosecutor Susan Dacanay, chairperson of the Justice Department’s Run After Tax Evaders Task Force, received the complaint against Mighty Corp. officials.

Dacanay said the complaints will undergo preliminary investigation to determine if there is probable cause to warrant the filing of charges in court.

The BIR said the cigarette firm was the subject of on-the-spot surveillance operations and that when investigating officers entered four warehouses leased by the corporation and conducted random tests, they found that the stamps used were fake.

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A check by the Excise Large Taxpayers Service also showed the stamps used were fake.

“The inventory showed that Mighty Corp. stored 66, 281 master cases containing 33,140,500 packs of cigarettes. The investigation further showed that 87.5 percent of [these] bore fake revenue stamps,” the BIR said.

The BIR also said the stamps were not affixed at the production plant as required by law.

The bureau said the company’s failure to present official delivery receipts showed that the cigarette packs in the warehouses did not come from the manufacturing plant in Barangay Tikay, where the stamps should have been affixed.

FAKE STAMPS. Two Internal Revenue officials file a criminal case against officials of the Mighty Corp. for using fake BIR stamps in their cigarette packs amounting to P9.5 billion before State Prosecutor Susan Dacanay at the Department of Justice Wednesday. Norman Cruz

Last week, Justice Secretary Vitaliano Aguirre II said Mighty Corp. gave in to President Rodrigo Duterte’s offer to pay P3 billion to settle its excise tax liabilities.

But Finance Secretary Carlos Dominguez III found the amount too small, saying the Bulacan-based cigarette manufacturer must pay 10 times over its assessed liability to the government.

Aguirre did not say though if the corporation would still be amenable to paying the higher amount.

Duterte previously said he would use the amount to upgrade the Mary Johnston Hospital in Tondo, Manila and to build additional hospitals in Basilan and Jolo, Sulu.

The company denies that it used fake tax stamps on its cigarettes.

Mighty Corp. manufactures the following brands of cigarettes: Mighty Menthol 100’s (Hard Pack); Mighty Menthol 100’s; Mighty Full Flavor King Size (Red); Marvel’s Menthol 100’s; Marvel’s Menthol (Hard Pack); and Marvel’s Menthol 100’s (Green). Its only BIR-registered production plant is located at 55 McArthur Highway, Barangay Tikay, Malolos, Bulacan.

The company’s legal counsel, Sigrid Fortun, said the company welcomed the filing of a complaint as it provided them the opportunity to clear their names and show that they violated no tax laws.

“We will continue to cooperate with government in its continuing effort at tax collection,” Fortun said.

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