Mighty settlement to help fund Marawi rebuild
THE APPROVAL of Mighty Corp.’s acquisition by Japan Tobacco International (JTI) (Philippines), Inc. will allow the government to collect its P25-billion tax settlement on time, with the government thinking of using the proceeds on the reconstruction of Marawi City.
The Philippine Competition Commission (PCC) on Tuesday approved the acquisition by JTI of the embattled cigarette firm Mighty Corp. and Wong Chu King Holdings, Inc. after the body found that the sale would not lead to a “substantial lessening of competition.”
The deal was priced at $936 million or P46.8 billion, according to JTI.
Finance Secretary Carlos G. Dominguez III said the quick resolution paves the way for the collection of Mighty’s settlement offer, stemming from multibillion-peso cases involving tax evasion and fraud.
“We appreciate PCC’s quick action as this will mean that the taxes and penalties due to the government will flow into its coffers as scheduled,” Mr. Dominguez said in a text message to reporters, noting that the payment will help fund the government’s rehabilitation plan for wartorn Marawi City.
“This windfall of P30 billion is much needed to assist the displaced residents of Marawi, reconstruct the damaged portion of Marawi City, and to strengthen the Armed Forces capabilities against terrorists.”
PCC Chairman Arsenio M. Balisacan earlier said the antitrust body would likely take 30 days to study the JTI buyout.
Mr. Dominguez previously said that another P5 billion in value-added tax will be collected by the government from the JTI- Mighty transaction, bringing the total haul to P30 billion.
Mighty sought a cash settlement rather than face multiple charges stemming from alleged tax evasion and the use of fake tax stamps for its cigarette products, which are cheaper than those sold by other producers.
Last month, the cigarette firm paid P3.44 billion to the government as an initial settlement of its tax deficiencies. It committed to pay P21.5 billion more once the JTI sale pushes through and secures regulatory approval.
A SOLDIER outside a damaged building in Marawi