DAVAO CITY (MindaNews / 26 Nov) — Some 9,466 cases equivalent to 4.73 million packs of cigarette seized from the beleaguered Mighty Corporation for using fax tax stamps were destroyed here Sunday.
The destruction of the cigarettes worth P142.44 million was done at the Geocycle Compound of Holcim Philippines Inc. in Bunawan, Davao City, through a process using a thermal treatment called “co-processing,” which uses the materials as a fuel to run the manufacturing plant of Holcim.
The cigarettes with counterfeit stamps were discovered at the warehouse owned by Sunshine Cornmill Co., Distribution in General Santos City in a joint operation conducted by personnel of Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) on March 6, 2017.
In a message read by Assistant Secretary Kelvin Lee of the Office of the Executive Secretary, Finance chief Carlos G. Dominguez said the incineration of the confiscated cigarettes showed government will go after the products and destroy them should their manufacturer fail to pay taxes.
“The incineration we will witness today 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,” he said.
Aside from Lee, other officials who witnessed the destruction of the cigarettes included BIR Assistant Commissioner Teresita Angeles, who heads the bureau’s Large Taxpayers’ Service (LTS); BIR 11 director Nuzar Balatero, BIR Revenue Region No. 18 – Koronadal City director Esmeralda Tabule; and Jeper Ylagan senior environmental management specialist of the Department of Environment and Natural Resources; Alejandro Cenon Paje, the senior technical officer of the Framework Convention on Tobacco Control Alliance Philippines; Cyril Lubaton of Japan Tobacco International and representatives of the soon-to-be defunct Mighty Corp.
A briefer from the Department of Finance (DOF) said the confiscated cigarettes came in various brands such as Mighty Menthol 100s, Marvels Menthol, Marvels FK and King Full flavor with estimated excise tax value of P1.394 billion, including the penalty.
“The decision to incinerate these confiscated cigarettes came easily. We imposed six taxes on these products in part to protect health of our people. It would be wrong to release these products to the market,” Dominguez said.
The finance chief said this was not the largest pile of cigarettes that was confiscated from the Mighty Corporation this year.
He said the government also seized 66,245 cases in Simon, Pampanga and 163,183 cases in San Ildefonso, Bulacan. Each case contains 500 packs of cigarettes.
But he noted there were also smaller stockpiles confiscated in Tacloban and Cebu.
Dominguez said these tobacco products with fake stamps represent billions of lost revenue to the government and warned that they will not hesitate to seize and destroy other tobacco products of erring companies who fail to pay the corresponding excise taxes.
The Mighty Corporation already paid the government P2.071 billion in excise taxes in two tranches – P1.002 billion in September and another P1.069 billion in October this year, a briefer said.
The total tax liabilities of Mighty Corporation with government amounted to P25 billion and another P5 billion worth of value added tax (VAT) from the sale of the firm’s manufacturing assets and distribution network to the Japan Tobacco Inc. (JTI) in September this year at P45 billion.
It added the takeover by the JTI of Might Corp. resulted to a “200-percent increase in the excise tax payments for the period between September to October (2017) for this cigarette manufacturer compared to the same period last year.”
The higher “sin” tax collections will improve the health care facilities and enable the Department of Health to procure additional medicines and provide services that will help prevent and control the respiratory-related diseases caused by the tobacco use, the briefer added.
The Japanese firm is expected to pay a minimum of P3.1 billion a month starting January 2018, it said.
The BIR filed three complaints against the Mighty Corporation before the Department of Justice (DOJ) for the use of fake stamps this year but it was dropped in July after the firm offered to settle its tax liabilities and shut down its operations. (Antonio L. Colina IV / MindaNews)