LOCAL cigarette manufacturer Mighty Corp. has slammed Philip Morris Fortune Tobacco Corp. (PMFTC) for its ”resurrected smear campaign” against it, saying the giant tobacco company is still bitter over its lost market share and revenues that resulted from the successful sin tax reform law.
“PMFTC’s pathetic attempts to resurrect its discredited campaign against Mighty show the depth of their desperation. We condemn in the strongest possible terms the irresponsible and malicious behavior of Philip Morris. This latest smear campaign is unacceptable and should be dealt with accordingly,” Mighty executive vice president Oscar Barrientos said in a statement.
Barrientos noted that PMFTC’s latest tirade against Mighty over alleged undervaluation of its imports was based on a study conducted by the Senate Tax Study and Research Office (STSRO) that is still incomplete and subject to final analysis.
It is for this reason, he said, that Rep. Raneo Abu of Batangas (2nd District), a member of the Joint Congressional Oversight Committee, had stated that only data submitted by concerned government agencies such as Bureau of Internal Revenue )BIR) , Bureau of Custom and National Tobacco Administration should be used by the oversight committee.
“What PMFTC conveniently did not disclose to the public is that the STSRO study used data culled from a report on alleged illicit tobacco trade conducted by the International Tax and Investment Center and Oxford Economics. This report was commissioned and funded by Philip Morris International [making]it self-serving,” Barrientos pointed out.
“This illicit tobacco trade report has since been debunked and discredited by tobacco control organizations and health groups as inaccurate and biased. Philip Morris exerted efforts to influence the government against adopting policies that affect its business,” he added.
“PMFTC’s latest statements are nothing more than a moro-moro [or]a farce [that they are]foisting in another attempt to have Republic Act (RA) 10351 amended. Their real agenda is to influence our government to amend the sin tax reform law because it leveled the playing field and took away their monopoly,” Barrientos said.
RA 10351, which was passed in 2011, reformed the country’s excise tax system and put in place a two-tier classification of cigarettes. The law was aimed at raising revenues and curbing smoking.
The law, according to the statement, has been “very successful” in boosting the government’s coffers.
The BIR reported that from January to September this year, incremental revenues from sin taxes hit P37.24 billion, higher than its P25.6-billion target.
Collections from tobacco products in the first three quarters hit P28.79 billion or 86.3-percent higher than the P15.45-billion target.
Meanwhile, the Department of Health reported that the sin tax law has been effective in reducing tobacco consumption among the youth and the poor, based on a survey by the Social Weather Stations.
“PMFTC accuses us of tax evasion as a reason for our pricing. Until the middle of this year, Mighty had been producing cigarettes exclusively in the low-price category. Our brands were priced higher than PMFTC’S low-price Jackpot brand, which is selling as of the third quarter of the year at P17.50 per pack. This is even lower than the excise tax and VAT combined of more than P18 per pack. We hope PMFTC can explain this to the public,” Barrientos said.
“Records will show that we have paid the corresponding taxes. This is why the BIR never charged us with tax evasion, because we paid the correct taxes,” he added.
Barrientos explained that they had settled all necessary duties with the Customs bureau for raw materials that it earlier imported for use in producing cigarettes for export but were subsequently used for domestic consumption.
“The Customs bureau audited us, assessed us for duties for our imports that were used for domestic consumption, and we settled whatever was assessed. PMFTC continues to muddle the facts to suit its position and support its attempts to have the sin tax law amended,” he said.