Belmonte questions BIR silence on mighty tobacco taxes

Speaker Feliciano Belmonte Jr. / Wikipedia Photo

MANILA – Speaker of the House Feliciano Belmonte Jr. is probing on what he deems as a “deafening silence” of the Bureau of Internal Revenue (BIR) with regard to Mighty Corp.’s suspected deceitful practices in order to avoid taxes and duty payments.

He said that he will not let a company like Mighty send all the Congress’ hard work to generate revenues from sin tax down the drain.

“I have to ask the oversight committee to give me a report on Mighty’s operations. It’s really a BIR affair but we have not been hearing about this. Their silence is really deafening,” said Belmonte during the weekly “Ugnayan sa Batasan” press conference.

Under the Republic Act No. 10351 or the act known as “An Act Restructuring the Excise Tax on Alcohol and Tobacco Product,” Belmonte noted that he already sent out a panel to look into whether private companies are paying correct taxes; whether government agencies are collecting the right taxes; and whether the sin tax collections are used properly.
He revealed that there are several cigarette manufacturers that already asked the BIR to investigate Mighty because of tax evasion charges against the company. However, Belmonte said that there has been no inquiry yet.

“Congress might as well find out why all of a sudden Mighty has become a big company,” said Belmonte. “Somebody has been questioning about sin taxes which should really be looked into.”

The Senate Tax Study and Research Office (STSRO), a congressional think tank, in a study revealed ways as to how it is possible for Mighty to evade tax payments.

According to STSRO, Mighty is guilty of diverting its cigarette output for export to the domestic market without paying the taxes for the products.

Mighty, the country’s oldest cigarette manufacturer, declared that 99 percent of its imported materials were for exports only and the remaining 1 percent is sold in local market. However, STSRO claimed gthat only 1 percent of Mighty’s exported cigarettes were made from imported materials.

Belmonte shared his disappointment on the findings of STSRO.

“Why do we let these companies operate in gross violation of our rules? We should ask BIR and Mighty to explain in Congress,” he said.

Likewise, he also said that he is frustrated that the House ways and means committee had not yet acted on the issue.