Finance Secretary Carlos Dominguez III has commended the Bureaus of Customs (BOC) and of Internal Revenue (BIR) for their sustained campaign against tax fraud following the BOC’s March 24 raid on two warehouses in Bulacan, which yielded P3.2 billion worth of Mighty Corp. cigarettes bearing fake tax stamps.
Dominguez said the BOC operation, conducted in Barangay Matimbubong in San Ildefonso, Bulacan, will enable the BOC and BIR to strengthen their legal action against Mighty Corp. for possession of cigarette packs with counterfeit internal revenue stamps, specifically for violations of Sections 263 and 265(c) of the National Internal Revenue Code of 1997.
The seized cigarette packs from this latest raid in Bulacan were assessed to have P2.4 billion in unpaid taxes.
The raid was conducted two days after the BIR filed a P9.65 billion criminal complaint against Mighty Corp. before the Department of Justice for unlawful possession of articles subject to excise tax without payment of the tax, and for possession of false, counterfeit, restored or altered stamps.
Dominguez likewise welcomed the ruling of the Manila Regional Trial Court rejecting the writ of preliminary injunction filed by Mighty Corp. against warehouse investigations done by the BOC.
The court’s rejection of the plea now paves the way for the BOC and the BIR to continue inspecting warehouses storing cigarettes manufactured by Mighty, including the facilities earlier raided by government operatives in San Simon, Pampanga.
“We commend the Bureau of Customs, the Bureau of Internal Revenue, as well as other agencies such as the Philippine National Police for remaining relentless in their joint campaign against tax fraud,” Dominguez said.
“The close cooperation we are now seeing between the BIR and the BOC against those who continue to undermine our reform agenda is the kind of teamwork we need in government. Their sustained operations against illegal activities demonstrate the Duterte administration’s firm resolve to expose tax cheats and bring action against them in court,” Dominguez said.
Dominguez said the sustained inspections done by the BOC and BIR on warehouses suspected to be storing cigarettes with counterfeit tax stamps are necessary to expose suspected tax dodgers and demonstrate the government’s resolve to haul them into court.
“The latest inspections done in Bulacan, for instance, would help the government build a strong case against Mighty. Any settlement is now out of the question until the courts say so,” Dominguez said.
Acting on a tip, a BOC border security team from the Port of Manila proceeded to Barangay Matimbubong in San Ildefonso, Bulacan in the early morning of March 24 and inspected two warehouses reported to house illicit cigarette stocks.
The inspections were done in coordination with the Philippine National Police and local officials in the area, according to a report submitted by the BOC to Dominguez.
“The security team conducted random sampling/checking of each mastercase (of cigarettes) per warehouse using the BIR Stamp Verifier and results confirmed presence of counterfeit/smuggled cigarettes and fake tax stamps,” the report said.
About 160,000 master cases with an estimated street value of P3.2 billion were uncovered during the inspections and found with bogus tax stamps.
The BOC has estimated that the cigarettes with fake stamps cost the government about P2.4 billion in unpaid excise taxes.
The BOC report said that the security team that inspected the warehouses recommended assistance to contact representatives of the BIR and the National Tobacco Administration “to provide support on further validation and physico-chemical examination/analysis of the said cigarette stocks.
