Denies bribery attempt
Bulacan-based cigarette maker Mighty Corp. claimed the Bureau of Internal Revenue (BIR) had used malfunctioning Taggant excise stamp validating devices during a recent raid in its Pampanga warehouses.
Mighty released this statement late Tuesday after President Rodrigo Duterte ordered the arrest of its owner.
The Department of Finance (DoF) on the same day said the government’s revenue-generating agencies are preparing the documentation for a legal action that will be taken against the company for allegedly using fake tax stamps for its products, in a series of raids conducted last week.
In a statement, Finance Secretary Carlos Dominguez 3rd said “the Bureaus of Internal Revenue (BIR) and of Customs (BOC) are now busy gathering evidence for submission to the Department of Justice (DOJ), preparatory to the government’s filing of an air-tight case against Mighty Corp. for tax evasion and other possible charges.”
However, he stressed that the government needs to first establish strong evidence to pin down the cigarette manufacturer for such charges.
“We must make sure the charges stick not only to haul the guilty parties, including their possible cohorts in the government, into jail, but to send a clear message to big-time tax dodgers that the Duterte administration is dead-set on putting an end to their nefarious activities and sending all of them behind bars,” he said.
Dominguez issued this statement on the heels of his call on the BIR and the BOC last week to file the appropriate charges soon against persons and companies proven to be the owners of smuggled and counterfeit tobacco products, shoes and clothes worth P2.2 billion which government agents had seized in a series of raids.
Among the seized goods were cigarette brands manufactured by Mighty Corp. with alleged fake tax stamps that the BOC operatives had seized in raids in Pampanga and the cities of General Santos and Zamboanga in Mindanao.
Duterte also on Tuesday said he has ordered the arrest of Mighty Corp. owner Alex Wong Chu King for economic sabotage. The President also accused the company of sending him a package that contained a pile of cash.
Wong Chu King then met with officials of the National Bureau of Investigation and the Department of Justice, saying that Mighty is ready to cooperate with the government’s investigation.
However, Mighty stressed that the BIR had used malfunctioning Taggant excise stamp validating machines, which produced varying results when it tested Mighty products that were seized during the raid in its warehouses in Pampanga.
In a statement on Tuesday, Mighty counsel Sigfrid Fortun said when the devices were used by BIR examiners on the confiscated cartons bearing Mighty cigarettes, they registered a green light, indicating they were genuine stamps and, later, registered red or bogus marks for stamps in the same carton.
Worse, when the same device was used to test tax stamps on products of its competitors brought in by one of the agents, the device also turned red, indicating that the competitors’ stamps were also “fake,” he added.
Fortun said the BIR should also sue and send notices of tax assessment to Mighty’s competitors.
In the same inspection proceedings conducted by joint teams from the BIR’s regional office in Pampanga and head office personnel, the devices either malfunctioned or were unable to read the tax stamps, leading Fortun to conclude that they were unreliable for purposes of assessing Mighty’s liability for tax fraud or deficiency in its excise tax payments.
The lawyer said BIR’s inspection team was belatedly authorized by its head office to inspect the excise stamps on the Mighty cigarettes found in its Pampanga warehouse after Mighty questioned the validity of the letter of authority used to justify the seizure of genuine cigarettes it produced.
Fortun also said this procedure cannot undo the invalid raid conducted with the help of mission orders issued to the BOC, as all items confiscated are now tainted for being fruits of an unlawful seizure order and letters of authority.
Mighty, nevertheless, expressed its willingness to cooperate and pay taxes based on the BIR assessments found both accurate and fair, he added.
“Mighty officials even went to the NBI and the DOJ offices today to convey the same posture of cooperation with the governments tax collection effort,” he said.
On the bribery attempt, Mighty, through Fortun, categorically denied any occasion or participation by the company in the supposed incident.
“Mighty has never taken part, nor has it ever indulged in such activity, especially with officers of the incumbent administration,” he said.
Fortun said Mighty was never involved, or identified as the giver of any such bribe. (See related banner story on B1 BIR: List tax evasion as a ‘heinous crime’)