Honest na: Dominguez expects P40B in annual taxes from Mighty after JTI takeover
The new owners are known to be honest and law-abiding.
Finance Secretary Carlos Dominguez III said the government will enjoy around P40 billion in taxes from cigarette company Mighty Corporation in 2018 following the takeover of Japan Tobacco Inc. (JTI).
This is assuming that Mighty will be paying around P3.1 billion in monthly taxes according to agency estimates, which is nearly double than the amount which the old Mighty owners used to pay.
It was eventually discovered that Mighty has been evading taxes by using fake tax stamps on their products, which led to the filing of multiple charges in court. The cases were eventually withdrawn after the company offered P25 billion as settlement instead of facing a long legal battle.
JTI bought Mighty’s assets for P46 billion shortly after the tax issue broke out, providing the Bulacan-based cigarette manufacturer with cash to pay its dues.
“For Fiscal Year 2018, JTI is expected to pay almost P40 billion out of the estimated P118 billion in total excise tax collections on tobacco products,” Dominguez said in a statement.
This would mean that taxes paid by Mighty will account for one-third of total sin tax collections on cigarettes.