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Mighty faces P27-B tax case, possible license cancelation

Mighty Corp. is facing a P27-billion tax case and the possibility of the cancellation of its license to operate. DOF/Released, File

MANILA, Philippines — Cigarette company Mighty Corp. is facing a slew of new tax complaints involving over P27 billion for their alleged possession and use of fake internal revenue stamps as the government agency was already working on the cancelation of the firm’s license to operate.

Internal Revenue Commissioner Cesar Dulay said that the initial P9.5-billion case it filed against Mighty Corporation last month involved only the raided warehouse in San Simon, Pampanga where inspectors from the Bureau of Customs found 60,000 master cases of Mighty cigarettes bearing fake tax stamps.

Dulay said that the case did not yet include the liabilities Mighty would face arising from the raided facilities in General Santos City and Bulacan which are considerably bigger, according to Dulay.

“The case we filed involving the San Simon warehouse, we estimated the amount at [over] P9 billion. Now, the Bulacan warehouse is three times bigger than the San Simon warehouse, so we're looking at times three,  about P27 billion. We used basic assessment and penalties,” Dulay said in a statement.

The BIR commissioner said that the raid in General Santos City yielded around 18,000 cases of Mighty cigarettes with fake stamps while the operation in Bulacan produced 160,000 master cases bearing fake tax stamps.

He said that they were expecting to finish the documentation and the gathering of evidence within the month or earlier.

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Aside from the facilities in General Santos and Bulacan, the Bureau of Internal Revenue is also preparing a case for the raid in the Mighty warehouse in Zamboanga.

Dulay said that they were already looking at the possibility of canceling Mighty’s license to operate which could lead to the complete stoppage of its operations. He also noted that the warehouse in Bulacan operated without such document.

“We're looking at that possibility, cancellation of the license. To begin with, the warehouse in Bulacan, there's no license. You have to have a license to operate that warehouse. On the manufacturing, we're firming it up, firming up our evidence on that,” Dulay said, adding that without a license its operations would cease.

The BOC earlier revoked Mighty’s license to import raw materials which would hamper its capability to manufacture its products.

“You could imagine that within the next two or three months if you don’t have a license [to import], there’s no importation of raw materials, how do you manufacture your cigarettes?” Dulay said.

Last March 22, the BIR filed a P9.5-billion lawsuit against Mighty before the justice department for its unlawful possession of articles subject to excise tax without payment of the dues and for possession of false, counterfeit, restored or altered stamps.

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