Mighty’s six tax payments up by 200% after buyout

THE takeover by Japan Tobacco Inc. of Mighty Corporation has led to a 200 percent increase (%) in the excise tax payments for the September-October period alone for this cigarette manufacturer compared to the same period last year, according to the Department of Finance (DOF).

Based on DOF data, Mighty Corp. paid P1.002 billion in excise taxes for September 2016 and another P1.069 billion in October of the same year, or a total of P2.071 billion for this two-month period.

For the same twomonth period this year, the amount of excise tax payments from Mighty Corp. increased to P6.2 billion, representing a 200% hike in sin tax collections from the firm.

Earlier, Dominguez said preliminary computations done by the DOF and the BIR show that the Japan Tobacco will pay a minimum of P3.1 billion a month starting January 2018, which is about P2 billion more per month than what Mighty Corp. had previously been paying.

"For Fiscal Year 2018, JTI is expected to pay almost P40 billion out of the estimated P118 billion in total excise tax collections on tobacco products," Dominguez said.

The amount represents a third of the total revenue collections from the excise tax on cigarettes.

Japan Tobacco completely took over the operations of Mighty Corp. in September after the latter sold its manufacturing assets and other properties to the Japan-based cigarette manufacturing company to be able to settle its tax liabilities with the government in the amount of P25 billion. DOF