The Department of Finance (DoF) reiterated on Monday that the government would not settle with cigarette maker Mighty Corp. over its P9.56-billion tax-evasion case.
“Any settlement is now out of the question until the courts say so,” Finance Secretary Carlos Dominguez 3rd said in a statement.
Charged by the Bureau of Internal Revenue (BIR) before the Department of Justice (DOJ) last week were Mighty officials retired general Edilberto Adan, retired judge Oscar Barrientos, Alexander Wongchuking, and Ernesto Victa, over possession of cigarettes with false, counterfeit, restored or altered tax stamps.
Dominguez commended the Bureau of Customs (BoC) and the BIR for running after tax cheats, following the BOC’s March 24 raid on two warehouses in Bulacan, which yielded P3.2 billion worth of Mighty Corp. cigarettes bearing fake tax stamps.
Dominguez said the BOC operation, conducted in Barangay Matimbubong in San Ildefonso, Bulacan, would strengthen the case against Mighty Corp.
Possession of cigarette packs with counterfeit internal revenue stamps violates Sections 263 and 265(c) of the National Internal Revenue Code of 1997.
The seized cigarette packs from the March 24 raid in Bulacan were assessed to have P2.4 billion in unpaid taxes.
The raid was conducted two days after the BIR filed a criminal complaint against Mighty Corp.
‘More inspections needed’
Dominguez also welcomed the ruling of the Regional Trial Court of Manila rejecting Mighty Corp.’s request for a writ of preliminary injunction against warehouse investigations by the BoC.
The court’s rejection of the plea paves the way for the BoC and the BIR to continue inspecting warehouses storing cigarettes manufactured by Mighty, including those earlier raided by government operatives in San Simon, Pampanga.
“The close cooperation we are now seeing between the BIR and the BOC against those who continue to undermine our reform agenda is the kind of teamwork we need in government. Their sustained operations against illegal activities demonstrate the Duterte administration’s firm resolve to expose tax cheats and bring action against them in court,” he said.
Dominguez said frequent inspections done by the BOC and BIR on warehouses suspected to be storing cigarettes with counterfeit tax stamps were necessary to expose and sue tax dodgers.
Tipster prompted raid
Acting on a tip, a BoC border security team from the Port of Manila proceeded to Barangay Matimbubong in San Ildefonso, Bulacan in the early morning of March 24 and inspected two warehouses reported to house illicit cigarette stocks.
The inspections were done in coordination with the Philippine National Police and local officials in the area, according to a report submitted by the BoC to Dominguez.
“The security team conducted random sampling/checking of each mastercase (of cigarettes) per warehouse using the BIR Stamp Verifier and results confirmed presence of counterfeit/smuggled cigarettes and fake tax stamps,” the report said.
The security team that inspected the warehouses recommended seeking assistance from the BIR and the National Tobacco Administration “to provide support on further validation and physico-chemical examination/analysis of the said cigarette stocks.”
About 160,000 master cases with an estimated street value of P3.2 billion were uncovered during the inspections and found to have bogus tax stamps.