DoF: Japan Tobacco backs PH tax drive


The Japanese company that snapped up the Philippines’ second-largest cigarette manufacturer has pledged to support the government’s drive to improve tax collections, the Finance department said.

In a statement, the department said that Japan Tobacco, Inc. (JT Group), which bought Mighty Corp for P46.8 billion after the latter was charged with avoiding taxes, had signed a letter of intent where it also expressed its intent to expand in Southeast Asia and make the Philippines a regional hub.

The company was represented by its president and CEO, Mitsuomi Koizumi and a ceremony was held at the Imperial Hotel in Tokyo with Finance Secretary Carlos Dominguez signing on behalf of the government.

“JT Group enthusiastically supports DoF in its tax collection effectiveness program and enthusiastically supports the realization of DoF goals to enhance the Philippines’ revenue base to bring about inclusive growth,” the letter states.

The company also said it would “continue to support the economic growth of the [Philippines] with contributions to infrastructure and human resource development” and help create more jobs while complying with government regulations and promoting “the welfare of the Filipino people through responsible corporate governance programs.”

The letter noted the government’s efforts to boost revenue collections “through timely collection of taxes, removal of the incidence of tax evasion and appl[ication of]commensurate penalties against delinquent taxpayers.”

The goal is to “improve health care facilities and enable the Department of Health to procure additional medicines and provide services that will prevent or lower medical risks” and “meet the unexpected costs of calamities and natural disasters.”

The Mighty acquisition led to tax collection windfall of over P30 billion for the government. The assets sold included Mighty’s distribution network, manufacturing equipment, qualifying inventories, and intellectual property rights.

“The reason for the investment is two-fold: The transaction enables the JT Group to consolidate its business foundation through expanded distribution and strengthened brand portfolio by providing JT Group with more than a quarter of market share in a country with robust economic growth and the transaction allows the JT Group to enhance its business base in the ASEAN region with the Philippines serving as its regional hub,” the letter states.
The Finance department said Japan Tobacco entered the Philippine market in 2000 with an initial investment of P10 billion, which increased to P20 billion in 2015 with the construction of a manufacturing plant at the Lima Technology Center in Batangas.



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