Philippine cigarette manufacturer Mighty Corp. is facing a string of additional criminal complaints involving tax liabilities of over P27 billion for the alleged possession and use of fake internal revenue stamps, according to initial assessments made by the Bureau of Internal Revenue (BIR).
Internal Revenue Commissioner Caesar Dulay pointed out that the P9.5-billion criminal complaint it filed against Mighty last month involved only one raided warehouse in San Simon, Pampanga, where the Bureau of Customs (BOC) found some 60,000 master cases of Mighty cigarette brands with alleged fake tax stamps. The case does not yet take into account separate inspections done on the manufacturer’s other facilities in General Santos City and Bulacan.
“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.
Dulay recalled that the BOC also conducted surprise inspections on a warehouse in General Santos City that yielded around 18,000 master cases of Mighty cigarettes with alleged fake tax stamps, and on the other one in Bulacan, which delivered the biggest haul with about 160,000 master cases.
“So we’re also working on that and hopefully within the month or even earlier we can complete the documentation and the gathering of the evidence,” Dulay said.
Last March 22, BIR filed a P9.5-billion criminal complaint against Mighty before the Department of Justice for unlawful possession of articles without paying the required excise tax, and for possession of false, counterfeit, restored or altered stamps.
Dulay said BIR is readying several sets of similar complaints against Mighty involving the warehouses in Bulacan and General Santos City and also involving another facility in Zamboanga.
Cancellation of license to operate
Asked about the possibility of canceling Mighty’s license to operate given the massive number of fake tax stamps allegedly uncovered by the authorities, Dulay said BIR is “already working on that,” and noted that the Bulacan warehouse was found to be operating without a license.
“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.
On shutting down Mighty’s operations altogether, Dulay said: “That’s a possibility.”
He recalled that BOC earlier cancelled Mighty’s license to import raw materials, which would constrain the company’s manufacturing capability. BOC also recently denied the motion filed by Mighty to lift its suspension order against the cigarette firm, levied after the manufacturer failed to present documents needed to identify and examine shipments that had arrived prior to the suspension.
“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.
Image courtesy of Stuart Miles at FreeDigitalPhotos.net
