• Mighty Corp asset sale needs PCC nod

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    THE government may collect payment of Mighty Corp.’s tax liabilities after the Philippine Competition Commission (PCC) approves the sale of the cigarette maker’s assets to JT International Philippines (JTI), Finance Secretary Carlos Dominguez 3rd said.

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    “This will be the largest sum of taxes collected ever from a single taxpayer in Philippine history. The date of full collection will depend on how fast the Philippine Competition Commission approves the sale of Mighty’s assets to the Japan Tobacco International whose largest shareholder, incidentally, is the Japanese government, Dominguez said in a speech at the Davao Investment Conference in Lanang SMX Convention Center in Davao City over the weekend. This was before Duterte accepted on Monday the tax settlement offer made earlier by Mighty.

    “Mighty will be out of the cigarette manufacturing business from now on,” Dominguez noted.

    Mighty offered to settle its tax liabilities valued at P25 billion, but Dominguez noted the amount could still go up to P30 billion once the value-added tax (VAT) and other fees are included in final computation of the settlement.

    The PCC is a quasi-judicial body created by law to promote and maintain market competition and a level playing field for business by keeping in check anti-competitive practices.

    Under Section 3 of the Implementing Rules and Regulations of the commission, parties to any merger or acquisition must notify and seek prior approval of the Commission if the transaction value is at least P1 billion.
    The Bureau of Internal Revenue (BIR) received the first tranche of Mighty’s settlement offer of P3.44 billion on July 20.

    Dominguez said at the time that the initial amount does not necessarily mean the government has formally accepted Mighty’s P25 billion offer.

    Even if the government finally accepts the settlement, it does not preclude any criminal charges that the BIR may file against Mighty, “as criminal cases cannot be compromised,” he pointed out.

    After the sale to JTI is consummated, the tax collections from Mighty are expected to go up by at least P1 billion per month. The money can be used to improve health care facilities and pay for additional medicines, commodities and services that will help prevent and control the deadly diseases caused by tobacco use.

    Mighty’s offer to settle its tax liabilities after the BIR and the Bureau of Customs worked together to expose its tax practices shows that the Duterte administration is also bent on implementing significant improvements in tax administration to raise more revenues, Dominguez said.

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