Aguirre says Mighty Corp. paid P40-B to settle tax deficiencies

Homegrown cigarette maker Mighty Corp. paid nearly P40 billion to settle tax deficiencies as part of a compromise deal that allowed the company to walk from criminal complaints filed before the Department of Justice, Justice Secretary Vitaliano Aguirre II said Friday.

The company settled the bill, covering unpaid excise taxes and other fees, weeks ago, Aguirre said, noting he was not privy to the terms of the deal between Mighty Corp. and the Bureau of Internal Revenue (BIR).

"The case is now considered withdrawn from our docket of cases because the BIR and Mighty Corporation have come to an agreement to settle the case. Under the National Internal Revenue Code and tax laws, settling a tax case is allowed and thus we could consider this case as closed and the government of the Philippines is richer by P40 billion," he said.

As of this posting, BIR Commissioner Caesar Dulay has yet to issue a statement after GMA News Online asked him to comment on the matter.

Three tax evasion complaints faulted the company for not paying excise taxes on cigarette products and for using counterfeit tax stamps on cigarette packs. The BIR valued the company's combined tax dues and other fees and charges at P37.88 billion.

Mighty Corp. tried to fight off the complaints but decided it was best to enter a compromise deal with the government, a decision that prompted owner Alexander Wongchuking to sell the cigarette business to Japan Tobacco Inc.

Last month, JTI announced the P46.8-billion ($936 million) acquisition deal was consummated after the Philippine Competition Commission approved the transaction. — VDS, GMA News