Mighty Corp tax payments under BIR scrutiny
MANILA, Philippines – The Bureau of Internal Revenue (BIR) is looking into the tax payments of local cigarette company Mighty Corporation following the P852.9 million payment demanded by the Bureau of Customs (BOC) for the importation of raw cigarette materials.
Mighty was also noted to be liable for non-payment of P4.421 billion in excise taxes by the Department of Finance (DOF) on top of the amount demanded by the BOC.
The Customs Bonded Warehouse (CBW) of Mighty was placed under suspension last January, per implementation of the Customs Administrative Order issued by BOC following DOF's directive to investigate the company's questionable imports and irregular practices, BOC Commissioner John Philip Sevilla said, as relayed to the bicameral conference committee. "... Similarly, the DOF, through the Fiscal Intelligence Unit, is also currently conducting an audit of the said company," he added.
The BOC demanded Mighty to pay P852.9 million, stated in the report submitted to the Senate Tax Study and Research Office. The company paid the amount on February 14.
"Mighty has a customs bonded warehouse. When you have a customs bonded warehouse, whatever raw materials you import, the presumption is it will also be exported. In the BOC's assessment, the imports and exports did not match," BIR Commissioner Kim Henares said.
Henares said that the presumption was that the products entered the domestic market. "So was it declared? We will have to look into that figure. We can work from there," the BIR chief said.
Initial review of records showed that raw material importation for products intended for export by Mighty rapidly increased for the years 2010 up to the present, with a minimal or “nil” amount reported for local production, the Senate was told.
Sevilla said that it was highly irregular for an importing company like Mighty to make duty payments for unusually large volume of bonded raw materials. "An initial check of the customs value used in the declaration in the covering import entries shows that the same may not be in accordance with the Transaction Value System,” the BOC chief added.
Importation records of the cigarette company are being sought by authorities. - Rappler.com