Authorities on Sunday destroyed the first batch of close to five million packs of Mighty Corp. cigarettes worth P142.44 million which were seized earlier this year in Mindanao for having counterfeit tax stamps.
Some 9,496 master cases equivalent to 4,748,000 cigarette packs of Mighty Menthol 100s, Marvels Menthol, Marvels FK and King Full Flavor brands were destroyed at the Holcim Philippines Incorporated Geocycle compound in Bunawan, Davao City.
The cigarettes were destroyed using the “co-processing” method which ensures total thermal destruction of waste materials, reduces toxic gas emissions and land and groundwater pollution.
“The decision to destroy these confiscated cigarettes came easily. We imposed sin taxes on these products in part to protect the health of our people. It would be wrong to release these products to the market,” Finance Secretary Carlos Dominguez III said in a statement.
Dominguez said the destruction of the seized cigarettes “is intended to deliver this message: tax evasion does not pay. We will confiscate the offending products and destroy them. No one will profit from the commission of a crime.”
The destruction of all 4,748,000 million packs will take place in batches because of their enormous quantity, further underscoring the scale of tax fraud attempted by the erring firm. About eight tons of cigarettes per day will be destroyed.
The cigarettes were seized on March 6 this year in a joint operation conducted by a composite team from the Bureau of Internal Revenue and the Bureau of Customs at a warehouse leased to Mighty Corp. in General Santos City.
The BIR and BoC have stepped up their joint search and seizure operations of illicit cigarettes and other products in line with President Rodrigo Duterte’s all-out drive against smuggling and tax evasion.
According to the BIR, the estimated deficiency excise tax liability of the seized cigarettes, including penalties, would have amounted to P1.39 billion.
The BIR said the warehouse where the cigarettes were seized belong to Sunshine Cornmill Corp. managed by Rosie and Alicia Liang.The confiscated tobacco products constituted the evidence in one of the three complaints filed by the BIR last May against Mighty Corp. before the Department of Justice for the use of fake tax stamps.
The complaints against Mighty had since been withdrawn after the company, with main headquarters in Bulacan, offered last July to settle its tax liabilities with the government for P25 billion and to shut down its operations.
Mighty Corp. subsequently sold its assets to JTI to help pay off its tax arrears.
Dominguez said the government stands to gain more than P30 billion in additional revenues from Mighty’s tax settlement once the value-added tax from the sale and other fees are paid.
He said this makes the tax settlement the largest sum ever paid by a single corporate entity in the country’s history.