Dominguez burns P3B worth of cigarettes in cement plant owned by wife’s family
MANILA — Finance Secretary Carlos Dominguez III on Tuesday personally witnessed the destruction of cigarettes with fake tax stamps confiscated from the warehouses of Mighty Corp. in Bulacan and Pampanga last March.
The event, held at the Norzagaray cement production plant of LafargeHolcim, was the first for the Philippine government after implementing a strong drive against tax evaders.
Dominguez’s wife is a member of the Alcantara family which controls Holcim. Dominguez said Mighty Corp. and not the government paid Holcim for the destruction of the cigarettes but he did not say the cost of burning the cigarettes.
In a briefing, Dominguez said some 229,428 boxes or 114.714 million packs of cigarettes worth P3.316 billion had been delivered to the cement company’s geocycle compound in Bulacan.
These cigarettes included Mighty Menthol 100s, Marvels Menthol and Marvels FK.
Dominguez said destruction of the cigarettes through a process called co-processing was being done to ensure that none of these go back to the open market and deprive the government of the necessary taxes.
“More importantly we want to deliver the message that tax evasion does not pay. Our revenue agencies are alert, adept and empowered to ensure that taxes due specially sin taxes are properly collected,” he said.
“We are totally focused on our mission to raise revenues for the government that the government needs to build a vibrant and inclusive economy for our people,” he said.
Discovery and confiscation of the said cigarettes allowed the government to run after Mighty Corp. and required it to pay billions worth of unpaid taxes.
The cigarette company has entered a settlement deal with the government to pay its tax obligations amounting to P25 billion. Its initial payment of P3.44 billion was made last July.
The remaining amount will be paid by Japan Tobacco Inc. (JTI), which bought Mighty Corporation’s manufacturing assets and other properties.
Dominguez said the government would gain P30 billion from Mighty Corp. and JTI once value added tax (VAT) had been included in the payment of tax arrears.
Two weeks ago, Dominguez also lead the destruction of about five million packs of cigarettes amounting to around P142.44 million confiscated from the Mighty Corp. warehouse in Mindanao.
The cigarettes also bore fake stamp taxes.