MANILA–Department of Justice (DOJ) Secretary Vitaliano Aguirre said that panel of prosecutors who will handle the complaint filed by the Bureau of Internal Revenue (BIR) on the PHP9.564-billion tax evasion complaint against controversial cigarette firm Mighty Corporation and its officials is set to start the preliminary investigation on the matter.
Aguirre named Senior Assistant State Prosecutor Sebastian Caponong as chairperson of the panel with Assistant State Proseuctors Ma. Lourdes Uy and Mary Ann Parong as members who will handle the preliminary investigation aimed at determining whether the company’s officials should be charged over the unlawful act of using fake stamps on cigarette packs and evading payment of the tobacco excise tax.
“I just formed the three-member panel. “We have to make Might Corp. answer the charges first and then the BIR will reply before the case will be submitted for resolution,” he told reporters in recent interview.
The DOJ chief said Mighty Corp. has agreed to pay the amount of PHP13 billion as compromise payment for its tax liabilities and penalties so that the government would no longer pursue criminal cases against the firm and its executives.
“Might Corp. is willing to pay the amount, but requested to settle it in a staggered scheme of PHP1 billion per payment,” Aguirre noted.
However, Aguirre said that President Duterte doesn’t like it as he wants full payment of the amount because he doesn’t want this to be another of (online gambling tycoon) Jack Lam.
Because of this, Aguirre said the tobacco firm would have to pay the amount in full they really hoped not to face criminal prosecution, trial before the Court of Tax Appeals and payment of bigger amount of tax deficiency and penalties.
Apart from the PHP9.564-billion, the BIR is reportedly preparing more tax evasion charges against Mighty Corp. in connection with the firm’s other cigarette packages with fake tax stamps seized from its other warehouses.
Aguirre explained that a compromise deal between the government and erring taxpayers is allowed under the National Internal Revenue Code.
In its complaint, the BIR accused the Mighty Corporation of violations of the National Internal Revenue Code (NIRC) for allegedly using bogus tax stamps on their products to evade the payment of excise tax to the government.
The charges involved unlawful possession of articles subject to excise tax without payment of tax and possession of false, counterfeit, restored or altered stamps in violation of Sections 263 and 265 (c) of the NIRC, respectively.
Named respondents in the complaint were Mighty Corporation officials Alex Wongchuking (assistant corporate secretary), former Armed Forces Deputy Chief of Staff Edilberto Adan (executive vice president), retired Judge Oscar Barrientos (vice president for external affairs) and Ernesto Victa (treasurer).
The complaint stemmed from a raid by Bureau of Customs (BOC) personnel on Mighty Corporation’s four warehouses in San Simon Industrial Park (SSIP) in San Isidro, Pampanga, which led to the discovery of fake tax stamps on cigarette packs.
The BIR said the corporation was the subject of an on-the-spot surveillance operations of untaxed cigarette products and that when investigating officers from its regional unit in Central Luzon entered four warehouses leased by the corporation and conducted random test of 10 master cases of cigarette stores in the said warehouses, it showed that the stamps used are fake and subsequently confiscated.
After the operation, the BIR directed its revenue officers belonging to the Excise Large Taxpayers Service to check the authenticity of the internal revenue stamps on the pack of cigarettes and once again found the stamps to be fake.
“The inventory showed that Mighty Corporation stored 66, 281 master cases containing 33,140,500 packs of cigarettes. The investigation further showed that 87.5 percent of the said stamps bore fake revenue internal stamps,” the complaint said.
Likewise, the BIR said they were not affixed at the production plant of the corporation in Brgy. Tikay, Malolos, Bulacan as required by law since “no official delivery receipts for the warehouses located in San Simon Industrial Park (SSIP), San Isidro, Pampanga were presented by the corporation as per certification of revenue officers.”
The BIR said such failure to present the official delivery receipts showed that the cigarette packs in the SSIP warehouses did not come from the manufacturing plant in Brgy, Tikay where such stamps should have been affixed.
“It should be noted that the warehouses in SSIP are not registered with the BIR as certified by the Excise Large Taxpayers Regulatory Division. Thus, Mighty Corporation cannot legally remove these packs of cigarettes from their only plant in Brgy. Tikay for delivery to the unregistered warehouses,” the complaint added.
For his part, Wongchuking’s counsel Philip Sigfrid Fortun said the company welcomes the BIR complaint that will provide clear the names and will continues to cooperate to the government.
”The company welcomes the filing by the BIR of the complaint as it provides us an opportunity to clear our names and show we violated no tax laws. We will continues to cooperate with government in its continuing effort at tax collection,” Fortun said in statement.