MANILA–The Department of Education (DepEd) has joined the campaign of the Department of Finance (DOF) against Mighty Corp., whose estimated tax liabilities of at least P9.5 billion could either feed 4.4 million school children or help close the perennial backlog in classrooms, teachers and learning materials in the public school system.
Finance Secretary Carlos Dominguez III said last month’s criminal complaint against Mighty Corp. covered the alleged non-payment of PHP9.5 billion in excise taxes on cigarettes seized from one warehouse alone, and does not yet take into account the three other raided warehouses leased by the firm where the Bureau of Customs (BOC) had found 90 percent of Mighty cigarettes with fake internal revenue stamps.
In a note to Dominguez, DepEd Secretary Leonor Briones said that in the first complaint alone involving PHP9.5 billion in unpaid taxes, the government could have built 7,600 classrooms for elementary and junior high school learners or 3,800 buildings for senior high school students.
The same amount could have also helped feed 4.4 million school kids for 120 days under the DepEd’s School-based Feeding Program that aims to address undernutrition and short-term hunger among public school learners from Kindergarten to Grade 6, Briones informed Dominguez.
Briones likewise said that PHP9.5 billion could have also procured computer packages for 3,800 public schools or set up 3,800 science laboratories.
Moreover, PHP9.5 billion of Mighty’s initial tax liabilities could have also hired 34,966 public school teachers, Briones said.
Last March 22, the Bureau of Internal Revenue (BIR) filed a PHP9.5 billion criminal complaint against Mighty Corp. before the Department of Justice (DOJ) for unlawful possession of articles subject to excise tax without payment of the tax, and for possession of false, counterfeit, restored or altered stamps.
The use of fake tax stamps was uncovered during a series of surprise BOC inspections on warehouses strong cigarette brands belonging to Mighty Corp.
In a recent interview, Dominguez said the BIR had filed the “first of probably four or five” complaints for possession of fake cigarette stamps and untaxed cigarettes against Mighty, as it is easier to prove in court than tax evasion.
“We filed only a case in one warehouse, and [Mighty] owes us PHP9 billion. We haven’t filed the cases in the other three warehouses yet. Every warehouse we raid, 90 percent of the stamps is unpaid,” Dominguez said.
Earlier, the Department of Health (DOH) also backed the DOF’s campaign to expose, and run after, tax cheats in the cigarette industry, in which just an additional PHP1 billion in unpaid taxes could have been spent to procure medicines and pay for the medical treatment of some 5.7 million indigent Filipinos afflicted with hypertension and diabetes.
According to DOH Secretary Paulynn Ubial, the Department’s initial calculations show that PHP1 billion can be used to pay for daily maintenance medicines, laboratory work and medical care for deadly diseases caused by tobacco use. With an augmentation of a mere PHP1 billion to the DOH program, the Department would be able to treat 3,975,421 patients with hypertension, and 1,705,030 with diabetes, Ubial has said.
Describing Mighty’s tax liability as a “double whammy,” Ubial said that “although the cigarette company had already earned staggering amounts of money over the past few years by distributing products that support unhealthy habits, Mighty Corporation has also hurt the Filipino people by failing to pay the legally prescribed taxes that are meant to support efforts to promote the health of the least privileged in society.”
Dominguez has welcomed the DOH’s expression of support, and assured Ubial that Mighty Corp. would get no special treatment from the DOF, BOC or BIR.
“The rule of law must be applied equally. All kinds of crime must face swift and sure justice, and Mighty Corp. is no exception. These fraudulent tax stamps represent billions of pesos worth of theft from the Filipino people,” Dominguez has said.
“The current sin tax law was passed to help devote more resources to health care. It is alleged that Mighty has evaded P9 billion worth of taxes, if not more. Imagine how many hospitals, how many surgeries, how many vaccines, how many prescriptions could have been administered with that money and how many lives could have been saved,” Dominguez said.
“Rest assured, we are pursuing this case in consideration of the magnitude of what has been deprived from the Filipino people,” he added.