Mighty Corp blames ‘malfunctioning’ BIR devices for ‘fake’ stamps

MANILA, Philippines – As revenue officials prepared an “air-tight case” against the country’s oldest cigarette company, Mighty Corporation claimed that the “malfunctioning” devices of the Bureau of Internal Revenue (BIR) had mistakenly deemed its products as bearing fake tax stamps.

Mighty made the statement on Tuesday night, March 7, hours after President Rodrigo Duterte ordered the arrest of its president, Alex Wongchuking, for “economic sabotage” over the alleged use of fake cigarette tax stamps.

“Mighty Corporation confirmed today the Bureau of Internal Revenue’s  malfunctioning taggant excise stamp validating devices which produced varying results when used today against its products that were seized in last Thursday’s unlawful raid in its warehouses in Pampanga,” the company said.

On March 1, a raid of the Bureau of Customs (BOC), with the BIR and local police, on warehouses in Pampanga and General Santos City yielded nearly P2 billion worth of cigarettes with fake stamps. 

Following the raid, the BOC said that it was mulling a P1-billion tax evasion case against Mighty.

On Tuesday night, Mighty said its lawyer, Sigfrid Fortun, noted that the devices used by BIR examiners on the seized cigarette cartons “registered a green light indicating they were genuine stamps and, later, registered red or bogus marks for stamps in the same carton.”

“Worse, when the same device was used to test tax stamps on products of its competitors brought in by one of the agents, the device also turned red indicating that the competitors’ stamps were fake. Fortun said that the BIR should also sue and send notices of tax assessment to Mighty’s competitors,” it added.

Given this, the company said, its lawyer concluded that the machines used for the raid “were unreliable for purposes of assessing Mighty’s liability for tax fraud or deficiency in excise tax payments.”

‘Air-tight case’

Even with its own findings, the company promised to cooperate with authorities on the matter.

“This notwithstanding, Mighty had expressed its willingness to cooperate and pay taxes based on BIR assessments found both accurate and fair,” it said.

Mighty added that its officials, led by Wongchuking, went to the Department of Justice (DOJ) and the National Bureau of Investigation on Tuesday “to convey the same posture of cooperation with the government’s tax collection effort.”

The Department of Finance said in a statement on Tuesday that the BIR and the BOC are gathering evidence for submission to the DOJ, in preparation for the filing of an “air-tight case” against Mighty for tax evasion and other possible charges.

“The government needs to first establish strong evidence to pin down this cigarette manufacturer on such charges,” Finance Secretary Carlos Dominguez III said in a statement.

“We must make sure the charges stick not only to haul the guilty parties, including their possible cohorts in the government, into jail but to send a clear message to big-time tax dodgers that the Duterte administration is dead set on putting an end to their nefarious activities and sending all of them behind bars,” Dominguez added. 

In February, the Philippine Star reported that Customs Commissioner Nicanor Faeldon was eyeing the suspension of Mighty’s import accreditation for alleged misdeclaration. His predecessor, John Sevilla, had made the same recommendation but was unable to implement it. – Rappler.com