The government could gain an additional P500 million next year from corporate income taxes once Japan Tobacco International (JTI) (Philippines) seals its acquisition of cigarette maker Mighty Corp., a Cabinet official said on Monday.
“There will be about P500 million [in income tax revenues]more or less,” Finance Secretary Carlos Dominguez 3rd told reporters.
The government already expects to earn a P30-billion windfall from the JTI-Mighty deal, with P25 billion accounting for the settlement of Mighty’s tax liabilities and the remaining P5 billion from taxes on sale itself.
The money, the Finance department has said, will be used to rehabilitate Marawi City and upgrade the military’s anti-terrorist capabilities.
“That is why we are very happy that the PCC [Philippine Competitive Commission] acted expeditiously on this so that the projected cash flow will be actually met,” Dominguez added.
The PCC approved the P45-billion sale of the country’s second-largest cigarette maker last week, saying: “There appears to be no ability nor incentive for the parties to engage in anti-competitive coordinated behavior.”
Mighty already forwarded an initial P3.44 billion last July and the remainder of the settlement offer can now be paid following the PCC’s clearance.
Dominguez has said the government’s acceptance of the settlement does not preclude any criminal charges against cigarette firm.