B from Mighty tax compromise

tax [including value-added tax] will be around billion, or slightly in excess of billion. That's the calculation,” Dominguez said. Mighty Corp. had earlier offered government R25 billion in tax settlement.

“But basically it seems like a good deal,” he added.

Asked about the present status of the settlement after the government accepted the initial payment of R3.44 billion from Mighty Corp., Dominguez said “we are studying it.”

“We have not formally approved this. But of course [when] somebody will come up and give us R3.44 billion, of course we will not say no,” the finance chief said.

Dominguez added the tax compromise deal between the Bureau of Internal Revenue (BIR) and Mighty Corp. will not require President Duterte’s nod.

“It doesn't need the approval of the President. Actually, technically speaking the approval power lies within the power of the BIR commissioner, by law,” he pointed out.

Last week, a binding memorandum of agreement was signed by members of the Wongchuking family, paving the way for JTI’s local unit to proceed with the issuance of a manager’s check amounting to R3.44 billion, which the government accepted.

The initial payment to the government covers Mighty Corp.’s excise tax liabilities and was deposited at the SSS branch of the Land Bank of the Philippines in Quezon City.

Speaking to The Manila Bulletin on a condition of anonymity, sources said the transaction between Mighty Corp. and JTI Philippines is “a done deal,” noting the Japanese-firm already deposited R21.5 billion into an escrow account at a state-owned bank.

Dominguez, meanwhile, revealed that it was the Japanese Minister and Deputy Minister of Finance who told the Philippine government about the interest of JTI in acquiring Mighty Corp., a homegrown cigarette-firm embroiled in the alleged use of fake tax stamps.

“They wrote me a letter [sometime in May] asking me to talk to the JTI people. So, I said yes, we will meet the JTI guys,” Dominguez said. “You know when your colleague or counterpart asks you to do something, of course you will do it.”

Sources, meanwhile, said the buyout deal between JTI Philippines and Mighty Corp. would be included in the second State of the Nation Address (SONA) of President Rodrigo R. Duterte today.

“The President would likely order Dominguez to accept the compromise offer by Mighty,” an industry source said.

In a letter to BIR Commissioner Caesar Dulay dated July 10, Mighty Corp. offered to settle its tax liabilities for R25 billion. The amount represents the deficiency excise taxes (R3.5 billion) and the internal revenue taxes of the company and its shareholders (R21.5 billion).