Tax collected from Mighty up by P4 billion monthly since JTI takeover

MANILA, Philippines – Monthly excise taxes collected from Mighty Corporation increased by roughly P4 billion since Japan Tobacco Incorporated (JTI) took over the operations of the cigarette manufacturer, data from the Bureau of Internal Revenue (BIR) showed.

The Department of Finance (DOF) said in a statement on Sunday, February 4, that excise tax payments on Mighty brands surged by 262% to P20.22 billion from September to December 2017 – or about P4 billion a month – compared to the collection of P5.57 billion for the same period in 2016, when Mighty was still controlled by its previous owners. 

“What stands out there is the Mighty-JTI improvement in collections as they represented 262% improvement from September to December,” BIR Commissioner Caesar Dulay said in the statement.

Dulay, in his report during a recent executive committee meeting of the DOF, said total excise tax collections for September to December 2017 surged by 26.68% to P71.24 billion, from the P56.24 billion recorded in the same period in 2016.

Excise tax collections from the tobacco industry comprised 57.4% of the total excise tax collections for September to December 2017, contributing P40.91 billion that year, Dulay was quoted as saying in the statement.

Bulacan-based cigarette manufacturer Mighty offered to settle its tax liabilities last July for P25 billion and sell its business to JTI. This was after the Bureau of Customs (BOC) and the BIR raided its warehouses in Pampanga, Bulacan, General Santos City, and other parts of the country, uncovering Mighty’s “wide-scale use of counterfeit tax stamps.”

The BIR then filed before the Department of Justice (DOJ) 3 criminal complaints against Mighty for its use of counterfeit revenue stamps and non-payment of excise taxes. (READ: Duterte accepts Mighty Corp’s P25-B tax settlement offer)

From the tax settlement and the sale of Mighty’s assets to JTI, the DOF said the government has so far collected about P30 billion, which is the largest sum of taxes ever collected from a single corporate entity. 

About 120 million packs of cigarettes bearing the Mighty brands were seized by the BIR and the BOC in 2017 in several operations, which included smaller hauls in the cities of Tacloban and Cebu.  

The government is now implementing higher tobacco excise taxes under the Tax Reform for Acceleration and Inclusion (TRAIN) law. – Rappler.com