An expected P30-billion windfall from the sale of cigarette firm Mighty Corp to Japan Tobacco will be used to rehabilitate Marawi City and upgrade the military’s anti-terrorist capabilities, the Finance department said.
“We appreciate PCC’s quick action as this will mean that the taxes and penalties due to the government will flow into its coffers as scheduled,” Finance Secretary Carlos Dominguez 3rd told reporters late on Tuesday.
The Philippine Competitive Commission earlier that day approved the P45-billion sale of the country’s second-largest cigarette maker, saying: “There appears to be no ability nor incentive for the parties to engage in anti-competitive coordinated behavior.”
P25 billion of the amount will be used to settle tax evasion cases filed by the government against Mighty. The government expects to earn another P5 billion from taxes on the cigarette firm’s sale.
The PCC is a quasi-judicial body created by law to promote and maintain market competition and a level playing field for businesses by keeping anti-competitive practices in check.
Deals worth at least P1 billion have to be cleared by the antitrust body.
“This windfall of P30 billion is much needed to assist the displaced residents of Marawi, reconstruct the damaged portion of Marawi City, and to strengthen the Armed Forces capabilities against terrorists,” Dominguez said.
The Bureau of Internal Revenue (BIR) received the first tranche of Mighty’s settlement offer of P3.44 billion last July 20.
Dominguez has said the government’s acceptance of the settlement does not preclude any criminal charges against Mighty.