Mighty set­tle­ment to help fund Marawi re­build

Business World - - THE ECONOMY - By Melissa Luz T. Lopez Se­nior Re­porter

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

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