The Bureau of Internal Revenue (BIR) has filed a second tax-evasion case against cigarette maker Mighty Corp. for possessing $26.93 billion of cigarettes with false, counterfeit, restored or altered tax stamps.
Charged before the Department of Justice were Mighty officials including Edilberto Adan, Oscar Barrientos, Alexander Wongchuking and Ernesto Victa.
Mighty Corp. produces Migthy Menthol, Mighty Full Flavor King Size and Marvel’s Menthol.
“As an offshoot of the surveillance and seizure activities conducted by the Bureau of Customs (BoC) on 24 March 2017, the Commissioner of Internal Revenue (CIR) issued a Mission Order (MO) directing revenue officers of the Large Taxpayers Service, among others, to conduct an inventory-taking of the cigarettes stored in Mighty Corp.’s warehouses at Km. 64 Barangay Matimbubong, San Ildefonso, Bulacan,” the BIR said.
The inventory yielded 81,591,500 packs contained in 163,183 master cases.
In the presence of BoC personnel and representatives of Mighty Corp. and Barangay Matimbubong, the BIR tested the tax stamps affixed on the cigarette packs. Using a Taggant reader, which is a BIR-registered equipment to test the authenticity of tax on cigarette packs, the BIR noted that 100 percent of the stamps on 536,000 cigarette packs (1,072 master cases) in the two warehouses were fake.
The BIR said the 24-day validation was done on March 27, 2017 to May 05, 2017.
“The master cases containing the said cigarettes with fake stamps were marked and seized. The stamps are fake since they did not contain one of the multi-layered security features of a valid internal revenue stamp,” it said.
“Likewise, they were not affixed at the production plant of Mighty Corp. in Barangay Tikay, Malolos, Bulacan as required by law since no official delivery receipts for the said San Ildefonso warehouses were presented by the respondent company as per certification of revenue officers in the premises of the BIR,” it added.
The BIR concluded that the cigarette packs in the warehouses did not come from the manufacturing plant in Barangay Tikay, where the tax stamps should have been placed to confirm that the proper taxes were paid before the items were removed from the production plant.
The warehouses in Barangay Matimbubong, San Ildefonso, Bulacan were not registered with the BIR as certified by the Excise Large Taxpayer Regulatory Division.
“Thus, Mighty Corp. cannot legally remove the said packs of cigarettes from their only plant in Tikay, Bulacan for delivery to the said unregistered warehouses. Mighty Corp.’s mere unexplained possession of the said packs of cigarettes with fake internal revenue stamps is illegal and a violation of the Tax Code,” it pointed out.
As a consequence of such criminal act the cigarette maker and its responsible corporate officers evaded the payment of correct excise tax and are liable to pay an estimated tax liability of P26.93 billion, , it said.
The second case is on top of the P9.56-billion case slapped by the BIR on Mighty in March for the same infractions.