CamSur Representative Luis Raymond “LRay” Villafuerte has appealed to the government’s anti-trust regulator to speed up its review and approval of the acquisition by Japan Tobacco International (JTI) of Mighty Corporation to enable the national government to get the rest of the P26.5 billion that it expects as full settlement of the latter’s tax liabilities, inclusive of the value-added tax charges.
Villafuerte said the Philippine Competition Commission (PCC), which has the power to review mergers and acquisitions valued at P1 billion and above, would aid the national government in its efforts to consolidate available public funds to finance the reconstruction of war-torn Marawi City and disaster-hit areas in the country if it reviews and approves the JTI-Mighty deal soon enough .
The transfer of Mighty’s assets and distribution network to JTI valued at P45 billion, will enable Mighty to make the full payment of its tax settlement offer to the government of P25 billion.
“A favorable and swift PCC decision on the sale will not only be advantageous to the government in terms of additional revenues, but would also lead to the shutdown of Mighty’s cigarette manufacturing and sales operations. The PCC would, indirectly, help the government clean up the private sector and beef up the government drive against tax dodgers,” Villafuerte said
Mighty, through JTI, had deposited P3.44 billion with the Land Bank of the Philippines last July 20 representing the initial payment of its tax deficiencies. The balance of P21.5 billion will be turned over to the government once the sale to JTI pushes through and is approved by the PCC.
According to PCC chairperson Arsenio Balisacan, the commission has already started the review of the deal, which could take up to 30 days if there are no problems with the submission.
But if there are issues or additional concerns regarding data, the commission has 90 days to evaluate all the submissions, Balisacan noted.
Finance Secretary Carlos Dominguez III has said that another P5 billion in VAT on the JTI-Mighty transaction would also be collected by the government, bringing the total tax haul from the settlement to P30 billion.
Villafuerte had earlier called on the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) to proceed without letup in its campaign against tax evaders by catching another “fish” as big as Mighty.
In lauding the BOC and BIR for exposing Mighty’s massive tax fraud, Villafuerte said this accomplishment early on in the Duterte administration shows that the government is bent on enforcing tax laws.
“The BIR and BOC have shown that they can do their jobs effectively if the President and the Secretary of Finance are tough in enforcing tax laws. They should be able to catch another ‘Mighty’ if they sustain this kind of campaign against tax cheats,” Villafuerte said.
He said the Duterte administration’s strong stance against tax evasion and ongoing initiatives to improve tax administration should all the more convince senators to pass package one of the tax reform package that the House already approved last May 31.
“Effective tax administration complemented by tax policy reforms carried out via the Comprehensive Tax Reform Program will provide the government the funds it needs to push through with its massive infrastructure buildup and maintain — if not even surpass — its economic growth targets of 7 to 8 percent starting next year,” the CamSur lawmaker said.
In his second State-of-the-Nation Address (SONA), President Duterte directed the DOF and BIR to accept Mighty’s offer to avoid a protracted legal battle with the firm that could take years to resolve.
