Health advocates hail shutdown of Mighty cigarette warehouse
MANILA, Philippines – Civil society groups lauded a move by the Bureau of Customs (BOC) and Department of Finance (DOF) to shut down the importation warehouse of Mighty Corporation over alleged smuggling.
In a statement, the coalition comprised of Action for Economic Reforms (AER), FCTC Alliance of the Philippines (FCAP), Philippine College of Physicians (PCP), and WomanHealth Philippines reiterated earlier controversial claims against Mighty, saying that the company has committed technical smuggling, which artificially lowered the prices of its cigarettes.
The reported artificial price-lowering shifted the consumption of cigarettes from higher-priced products to Mighty's brands, and lessened the impact of the Sin Tax Law's objective of discouraging smoking. (READ: Mighty Tobacco probed for selling cheap cigarettes)
The coalition said it was "gratified by the BOC’s action to temporarily close Mighty Corporation’s warehouse to prevent revenue leaks, as well as by the DOF’s wider effort of probing the allegations against the company."
The advocates also cited a DOF Task Force report, which they say affirms the charges against Mighty.
The report reads, "During the course of evidence gathering and documentation at the Port of Manila, it was noted that the subject Mighty has made a series of requests for large payments of duties and taxes of Mighty Corporation’s warehousing importations... it is highly irregular, bordering on the anomalous, for Mighty to make duty payments for unusually large volume of bonded raw materials that are supposed to be devoted to manufacturing and exportation of its finished products."
The group also noted the artificial lowering of prices as setting a "worrisome precedent that goads other tobacco manufacturers to follow suit." It cites a December 2013 case where Philip Morris Fortune Tobacco Inc. petitioned the Bureau of Internal revenue (BIR) to reclassify 4 of its Marlboro brands as low-priced tobacco products, which the BIR rejected.
The coalition reiterated its confidence in the BOC and BIR and its public officials in ensuring that Mighty and other firms follow tax and customs regulations.
"Under their watch," notes the coalition, "the supporters of the Sin Tax Law are confident that the gains of this landmark piece of legislation will continue to be safeguarded from threats for years to come." – Rappler.com