THE GOVERNMENT has received a second payment from Mighty Corp. amounting to P12.12 billion, the country’s Finance chief said on Thursday, just as the buyout of the embattled cigarette manufacturer by a Japanese firm was finalized this week.

In a statement, Japan Tobacco Inc. (JTI) said it completed the acquisition of the Bulacan-based cigarette producer on Thursday, which comes after two months of talks between the two firms.

The Japanese firm told the Tokyo Stock Exchange that its parent firm JT Group has acquired the tobacco-related assets of Mighty Corp. on Sept. 7 in a deal priced at P46.8 billion ($936 million).

JTI said its move to absorb Mighty Corp. – which is the producer of the cheapest cigarettes in the Philippine market through its Mighty and Marvels brands – is in line with its “geographic expansion” plans for sustainable growth.

JTI produces the international cigarette brands named Winston, Camel, Mevius, LD, and Natural American Spirit.

Back home, Finance Secretary Carlos G. Dominguez III said separately that the Bureau of Internal Revenue has collected P12.12 billion from Mighty Corp. this week, as part of the P25-billion tax settlement it offered to the government.

The payment follows a P3.44-billion payment in July as Mighty offered to settle its tax dues after the government lodged several cases before the Department of Justice for tax evasion and the use of fake tax stamps on their products. To date, this means the government has collected P15.56 billion so far.

The Department of Finance (DoF) expects to collect some P21 billion from the cigarette firm this September, while some P500 million will be paid by April next year representing the company’s dues for 2017.

The cases filed against Mighty are worth a total of P37.88 billion, according to the DoF. On the other hand, Mighty’s settlement offer is said to cover P3.5 billion in unpaid excise taxes, and P21.5 billion worth of internal revenue taxes of the company and its shareholders.

On Aug. 29, the Philippine Competition Commission approved JTI’s acquisition of Mighty Corp. and Wong Chu King Holdings, Inc. after the body found that the sale would not lead to a “substantial lessening of competition” in the local market.

Economic managers have said that they are considering to use these windfall collections for the rehabilitation of Marawi City, which has seen four months of battle between government troops and Maute terrorists.

The government expects to gain an additional P5 billion in taxes from the JTI-Mighty buyout deal, which would bring the tax haul to P30 billion. However, Defense Secretary Delfin N. Lorenzana said the recovery costs could reach P56 billion, which will cover reconstruction efforts, social assistance to displaced residents, the restocking of military ammunition, and funding replenishment. – Melissa Luz T. Lopez

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