PHILIP Morris Fortune Tobacco Corp. on Wednesday dared Mighty Tobacco Corp. to stop skirting the issues and disprove their alleged acts of fraud that a government report recently uncovered.
“Mighty can no longer hide from the facts which expose their questionable business practices, described by a senator as a clear act of fraud. The congressional inquiry highlighted the questionable business practices by Mighty,” PMFTC President Paul Riley said.
Mighty Corp., a local cigarette company owned by the Wongchuking family, is accused of allegedly using imported materials to make cigarettes for export but diverted them to the domestic market without paying duties and taxes.
The company likewise allegedly undervalued the cost of tobacco and filter imports to evade customs duties and import value added taxes.
“After reviewing all the government data, I concur with members of Congress that this is a clear case of fraud,” Riley said.
Instead of answering these very serious allegations, Riley said Mighty sought to discredit the report of the Senate Tax Study and Research Office (STSRO) by saying it was based on a private study conducted by the UK-based Oxford Economics.
“There is absolutely no data or reference in the STSRO report that comes from the Oxford Economics report” Riley insisted.
He noted the STSRO report is a government report and is a compilation of official data and facts collected from multiple agencies including the Bureau of Internal Revenue, National Tobacco Administration and the Department of Trade and Industry.
“Based on the STSRO report, Mighty is the one who should apologize to the Filipino people for its questionable business practices, that may have led to the loss of billions of pesos in tax revenues which could have otherwise been used to support public health programs among others” Riley said.
“We will not apologize for trying to help the government recover what are rightfully public funds. We will also not be intimidated by ridiculous statements and false comments aimed at masking the facts – this and other evidence will be pursued until something has been done about it. Enough is enough,” he added.
Riley said their company has no issues with Republic Act 10351 otherwise known as the Sin Tax Law and is not working for its amendment, a fact Mighty refused to acknowledge.
“When Republic Act 10351 was passed, we immediately and fully complied with it, and we continue to do so. Since its implementation, our position has been consistent—we support it and our only concern is its fair and effective administration,” Riley pointed out.
On the findings of the STSRO, Riley also challenged Mighty to explain its declaration of very low import prices of filter material as two US suppliers certified that they sold said filter materials at a much higher price range.
The report indicated that for filter materials, Mighty declared import prices between $0.36 and $0.40 per kilo. The US suppliers certified to the DTI that they sold filter materials from $5.35 to $6.70 per kilo.
With regard to tobacco leaf, Mighty imported Virginia tobacco from $0.68-$0.77 per kilo while the other importers declared between $4 and $6 per kilo.
Mighty reportedly imported Burley tobacco at $0.68 per kilo while the others paid $3.50 to $7 per kilo.
“In light of the findings of the STSRO, we believe that the relevant government agencies will not hesitate to enforce the full weight of the law, which includes criminal penalties, to achieve the government’s goal for everyone to pay the right taxes,” Riley said.