Duterte accepts P25b tax settlement from Mighty Corp.

July 24, 2017

President Rodrigo Duterte ordered on Monday the Department of Finance and the Bureau of Internal Revenue to accept the P25-billion tax settlement being offered by cigarette manufacturer Mighty Corporation. In his second State of the Nation Address, the Chief Executive said this would be the "biggest" tax settlement on record. "After the settlement, Mighty will no longer engage in tobacco business," he said. The BIR earlier filed three tax cases against Mighty before the Department of Justice. These cases cover the firm’s non-payment of excise taxes due its cigarette products and use of counterfeit tax stamps on its cigarette packs, which correspond to excise taxes valued by the BIR at a combined P37.88 billion. Duterte said Mighty's tax settlement "introduced a windfall for government which is significant since we have to face an unexpected cost of rebuilding Marawi and Ormoc." Marawi has been destroyed due to the government's operations against the Islamic State-inspired Maute Terror Group, while Ormoc was devastated by recent magnitude 6.5 earthquake. But Duterte clarified the acceptance of tax settlement offer "does not preclude other criminal charges against the company that BIR may decide to file." He added the settlement would allow government to avoid long court battle. Duterte warned companies Mighty's case would serve as a lesson that his administration would spare no one from cheating the government of its due. Duterte also warned mining firms the government would tax them to death if they would not be responsible and correct the destruction to the environment. "You, mining companies are already rich. This is my deal to you, either I will raise the taxes, the earning will be reserved to compensate for those who are suffering and in agony. You have to come up with a substitute, either spend to restore the virginity of their source or I will tax you to death," he said. "Otherwise, I’ll have to stop mining. I will ask you to stop it. It’s not good. We are a small group of islands," he stressed. He appealed to the Supreme Court to stop issuing temporary restraining order (TRO) on government projects, including on the full implementation of the Reproductive Health Law. Chief Justice Maria Lourdes Serreno was one of the around 3,000 guests in the gallery of the House's Plenary Hall. Duterte said because of the TRO on certain aspect of the RH law since two years ago, the medicine which was procured before would be expiring next month. Thus, he ordered Health Secretary Paulyn Jean Ubial to donate the medicine to other countries before it expires. Despite opposition from the Catholic Church, Duterte wants full implementation of the RH Law. (Celerina Monte/DMS)