Probe on nonpayment of P4B in excise taxes pushed

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A probe on cigarette manufacturer Mighty Corp.’s apparent non-payment of P4.421-billion worth of excise tax on cigarettes has been proposed in the House of Representatives.

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Rep. Jonathan de la Cruz of Abakada party-list, an opposition lawmaker, made the pitch under his House Resolution 663 which tasks the House Ways and Means panel to conduct an inquiry, in aid of legislation, on the alleged violations of the Sin Tax law by certain manufacturers, including non-payment of excise tax and massive underdeclaration of imported tobacco and other raw materials.

Dela Cruz cited that while Finance Secretary Cesar Purisima has already issued a memo tasking Finance Undersecretary Jeremias Paul, Commissioner Kim Henares of the Bureau of Internal Revenue (BIR) and then Customs Commissioner Rufino Biazon to probe the Mighty Corp. over its apparent non-payment of P4.421-billion worth of excise taxes, the said officials are yet to come out with a report to date.

The Sin Tax measure, signed into law by President Benigno Aquino 3rd in December 2012, raises excise taxes on tobacco and liquor products on a staggered basis from 2013 to 2015. Moreover, the Sin Tax law will also increase the excise taxes by four percent every year starting 2016 for distilled sprits and 2018 for cigarettes and beer.

“No less than Secretary Purisima issued the memorandum stating preliminary list of findings on anomalies on the trading and manufacturing activities of Mighty Corp. The [seemingly]failed attainment of the objectives of the said law thus brings into question the wisdom of tinkering with it in the first place,” de la Cruz said in his resolution.

The government sees the measure reducing health problems of poor people who are into cigarettes and liquor since the Sin Tax law would make them digger deep into their pockets for these vices.

On the other hand, the government is also expecting to generate more revenues with the implementation of the Sin Tax measure since excuse taxes on tobacco and liquor products have been stuck at 1996 levels prior to the measure’s passage.

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5 Comments

  1. Benedict Cordero on

    It feels like Purisima’s order was half-hearted, considering he didn’t feel the need to follow up with the four officials, and said officials didn’t feel the need to respond to his order. Was it just for show?

    The government should follow through with this probe and get to the bottom of this once and for all. Perhaps the officials should be questioned about their inaction as well.

  2. Carter Gumabay on

    The House of Representatives should really launch a full investigation into Mighty Corp.’s alleged tax fraud and technical smuggling. The cigarette company should be prosecuted to the full extent of the law and not be allowed to spit on the government’s face by walking away from their crimes unscathed.

  3. Anna Lisa Marquez on

    So, 4 top officials received a memorandum to probe Mighty Corp. on a possible P4B non-payment of taxes, and several months later, not one of them has made a move? And no follow up whatsoever from Purisima? Doesn’t make sense.

  4. Dina Dela Cuesta on

    Hopefully this probe really goes somewhere and punishes Mighty should all the allegations be proven accurate. The company shouldn’t be allowed to get away with this P4.421 billion nonpayment. What’s the point of having laws if not everyone has to abide by them?

  5. I hope that the House of Representatives would also look into the P1.5 Billion tax case of DUNKIN’ DONUTS local seller.

    The news article which appeared in this Newspaper on December 11, 2013 “WHO IS AFRAID OF DUNKIN’ DONUTS?”, by Columnist Emetertio Sd. Perez, mentioned that GOLDEN DONUTS, INC. (GDI) has unpaid tax deficit of P1.5 Billion for year 2007, but BIR Commissioner refused to either collect it or sue the company for tax evasion for under-declaring its revenues in the income tax return. GDI is the Philippine Franchisee of DUNKIN’ DONUTS OF AMERICA, INC. now DUNKIN’ BRANDS, INC.

    While Henares sows fears among taxpayers, she fears DUNKIN’ DONUTS’ local seller….a TAX EVADER?