THE DEPARTMENT of Finance (DoF) said that it accepted yesterday an initial payment from JT International (Philippines), Inc. of P3.44 billion on behalf of Mighty Corp. to cover the latter’s tax liabilities, but said the latter’s settlement offer remains under study.
“We accept the initial payment,” Finance Secretary Carlos G. Dominguez III was quoted in a statement as saying.
However, the DoF said that “such acceptance does not yet mean that it was agreeing to the company’s settlement offer.”
Likewise, he said that even if the government accepts its offer, it “does not preclude any criminal charges that the Bureau of Internal Revenue (BIR) may file against the company in connection with its tax-related cases, as these cannot be compromised.”
Asked whether Mighty Corp. has successfully remitted the payment, president and director Oscar P. Barrientos said yes, but declined to comment further.
The DoF said that it was informed that a manager’s check amounting to P3.44 billion — which covers the company’s non-payment of excise tax on its cigarettes — was issued yesterday by JTI on behalf of Mighty Corp. at the Social Security System (SSS) branch of the Land Bank of the Philippines in Quezon City.
This is the first tranche of the P25-billion settlement proposed by Mighty Corp. on July 10, which it will pay through a loan from cigarette manufacturer, JTI Philippines.
The remaining P21.5 billion balance — which represents the income tax deficiencies of the firm’s officers from 2010 to 2016 — will be paid upon completion of the acquisition deal between the two firms, which is currently being studied by the Finance department.
Mighty Corp. said in a letter to the DoF that it will sell to JT International (Philippines), a unit of Japan Tobacco International, its assets and affiliates of its manufacturing and distribution business — along with the intellectual property rights associated with these assets, including those owned by Wong Chu King Holdings, Inc., worth P45 billion, exclusive of value-added tax.
The DoF noted, however, that the offer does not extinguish the criminal complaints the cigarette firm currently faces due to non-payment of excise taxes and possession of counterfeit internal revenue stamps.
Mr. Barrientos has asked the BIR for a reinvestigation of its pending criminal complaint, upon completion of the initial payment.
After separate raids by the BIR and Customs bureau at Mighty Corp.’s warehouses in Bulacan, Pampanga, and General Santos City, the tax bureau filed three criminal complaints before the Justice department over tax liabilities totaling P37.88 billion.
The Bureau of Customs, for its part, blacklisted Mighty Corp.’s import accreditation to prevent it from continuing operations pending the conclusion of the criminal complaints.
Mr. Barrientos told the DoF earlier that management will retire the operations of Mighty Corp. following the conclusion of its deal with JT International (Philippines). — Elijah Joseph C. Tubayan
