Philippines: Mighty Pays BIR P5.4B in 9 Months

Source from:  Manila Bulletin 12/20/2013

The manufacturer and distributor of low-priced cigarette brands Mighty Corporation said on December 2 it remitted to the Bureau of Internal Revenue (BIR) more than P5.4 billion during the first nine months of the year and not P5.4 million as erroneously reported.

It said the remittance was more than 1.460 percent, or P346.5 million higher compared to the actual payment in the same period last year, and expected to hit P8-billion mark by the end of 2013.

The Bulacan-based cigarette company came out with the figure to dispute allegation made by an international research group allegedly hired by its giant competitor that it has been resorting to tax evasion and other trade malpractices to increase its sales and profits.

BIR Commissioner Kim S. Jacinto-Henares confirmed earlier that MC and other producers of low-priced cigarettes have increased their market share because of the new "sin" tax law which imposes higher excise tax rate on popular and high-priced cigarettes like Philip Morris, Marlbaro produced by Philip Morris Fortune Tobacco Corporation (PMFTC).

The BIR chief stressed she will not take side on the on-going trade war between the two companies.

She said PMFTC used to enjoy the advantage but with the new excise tax schedule a big slice of its market was eaten up by MC, as the former passed the additional tax to customers.

BIR's Large Taxpayers Service (LTS), which handles the investigation of the two corporations and 1,000 other top corporations, confirmed that due to the present economic difficulties many PMFTC customers have shifted to other low-priced brands produced by MC.

LTS officials who declined to be named said the low prices of MC's brands was crucial in increasing its sales. They added that MC as a local enterprise is able to maximize its profits because does not pay royalties to foreign mother companies and hire high-paid foreign consultants like PMFTC. Enditem