Gov’t won’t settle with Mighty Corp.

The government is unlikely to enter into a settlement with embattled cigarette-maker Mighty Corp. anytime soon as the fate of the Wongchuking owned firm now depends on the courts, the Department of Finance (DOF) said yesterday.

Finance Secretary Carlos G. Dominguez III said the DOF along with the Bureaus of Customs (BOC) and of Internal Revenue (BIR) are building a strong case against Mighty Corp., a homegrown tobacco manufacturer.

Last Friday, the Customs confiscated anew P3.2 billion worth of Mighty brand cigarettes allegedly affixed with fake tax stamps in two warehouses controlled by the tobacco firm in San Ildefonso, Bulacan.

“The latest inspections done in Bulacan, for instance, would help the government build a strong case against Mighty. Any settlement is now out of the question until the courts say so,” Dominguez said in a statement.

The seized cigarette packs from the latest raid in Bulacan were assessed to have P2.4 billion in unpaid taxes, the finance department said.

Last week, the BIR filed a P9.65-billion criminal complaint against Mighty Corp. before the Department of Justice (DOJ) for unlawful possession of unpaid tax cigarettes and “false, counterfeit, restored or altered stamps.”

Respondents in the complaint were Mighty Corp. President Edilberto P. Adan, Executive Vice President Oscar P. Barrientos, Vice President for External Affairs and Assistant Corporate Secretary Alexander D. Wongchuking, and Treasurer Ernesto A. Victa.

Mighty Corp.’s legal counsel Atty. Sigfrid Fortun had welcomed the case filing, saying the complaint “provides us an opportunity to clear our names and show we violated no tax laws.”

Inspections continue Meanwhile, Dominguez welcomed the ruling of the Manila Regional Trial Court (RTC) rejecting the writ of preliminary injunction filed by Mighty Corp. against warehouse investigations done by the Customs.

The court’s rejection of the plea now paves the way for the Customs and the BIR to continue inspecting warehouses storing cigarettes manufactured by Mighty Corp., including the facilities earlier raided by government operatives in San Simon, Pampanga.

“We commend the Bureau of Customs, the Bureau of Internal Revenue, as well as other agencies such as the Philippine National Police for remaining relentless in their joint campaign against tax fraud,” Dominguez said.

Acting on a tip, a Customs border security team from the Port of Manila proceeded to Barangay Matimbubong in San Ildefonso, Bulacan in the early morning of March 24 and inspected two warehouses reported to house illicit cigarette stocks.

The inspections were done in coordination with the Philippine National Police (PNP) and local officials in the area, according to a report submitted by the Customs to Dominguez.

“The security team conducted random sampling/checking of each mastercase (of cigarettes) per warehouse using the BIR Stamp Verifier and results confirmed presence of counterfeit/smuggled cigarettes and fake tax stamps,” the report said.

About 160,000 master cases with an estimated street value of P3.2 billion were uncovered during the inspections and found with bogus tax stamps.

The Customs has estimated that the cigarettes with fake stamps cost the government about P2.4 billion in unpaid excise taxes.

The BOC report said that the security team that inspected the warehouses recommended assistance to contact representatives of the BIR and the National Tobacco Administration “to provide support on further validation and physico-chemical examination/analysis of the said cigarette stocks.”

‘No authority’ Fortun, however, said the Customs has no authority to inspect cigarette tax stamps, saying this function is exclusively vested in the BIR.

“As no fake imported goods or smuggled cigarettes were found inside the warehouse, any action of the BOC may take on them will be legally infirm,” Fortun said in a text message.

Dominguez, on the other hand, commended the Customs and BIR for their sustained campaign against tax fraud.

“The close cooperation we are now seeing between the BIR and the BOC against those who continue to undermine our reform agenda is the kind of teamwork we need in government,” Dominguez said.

“Their sustained operations against illegal activities demonstrate the Duterte administration’s firm resolve to expose tax cheats and bring action against them in court,” he added.

The finance chief said the sustained inspections done by the Customs and BIR on warehouses suspected to be storing cigarettes with counterfeit tax stamps are necessary to expose suspected tax dodgers and demonstrate the government’s resolve to haul them into court.