Finance Secretary Carlos Dominguez III said the Duterte administration is determined to run after tax evaders, but with due process strictly observed in carrying out this goal.
“Our target are the guys who don’t pay their taxes, whether they’re a corporation or affluent individuals,” Dominguez said.
He said the Duterte administration is setting its sights first on efforts that will yield the most gain for the government.
“Just like Mighty (Corporation)… That’s where we put our effort. Of course the ones where the yields are higher,” Dominguez told reporters.
“First of all, we have to have good evidence that they are cheating on the tax,” he said. “It’s not just because you’re rich, we’ll go after you. That’s not fair also.”
Dominguez said, “If there’s evidence that you haven’t paid your tax — like for instance, we conduct a raid on the company and we see that there are a lot of untaxed goods that haven’t been …. of course we will go after that.”
“So it’s a lot of forensic investigation, forensic accounting, looking at the industry, you know, benchmarking, how come this guy has this percent of the market and pays only so much,” he added.
According to Department of Finance (DOF) data, the takeover by Japan Tobacco Inc. of Mighty Corp. has led to a 2o0-percent increase in the excise tax payments for the September-October period alone for this cigarette manufacturer compared to the same period last year.
The DOF said Mighty Corp. paid P1.002 billion in excise taxes for September 2016 and another P1.069 billion in October of the same year, or a total of P2.071 billion for this two-month period.
For the same two-month period this year, the amount of excise tax payments from Mighty Corp. when it was taken over by Japan Tobacco increased to P6.2 billion, representing a 2o0 percent hike in sin tax collections from the firm.
Dominguez earlier said preliminary computations done by the DOF and the BIR show that Japan Tobacco will pay a minimum of P3.1 billion a month starting January 2018, which is about P2 billion more per month than what Mighty Corp. had previously been paying.
“For Fiscal Year 2018, JTI is expected to pay almost P40 billion out of the estimated P118 billion in total excise tax collections on tobacco products,” Dominguez said.
The amount represents a third of the total revenue collections from the excise tax on cigarettes.
Japan Tobacco completely took over the operations of Mighty Corp. last September after the latter sold its manufacturing assets and other properties to the Japan-based cigarette manufacturing company to be able to settle its tax liabilities with the government in the amount of P25 billion.
Dominguez said the government stands to gain P30 billion from the settlement once the value-added tax and other fees from the sale are included.
This amount represents the biggest tax settlement ever from a single corporate entity in the country’s history.
