Finance Dept receives partial payment of P25-billion tax settlement offer from Mighty Corp.

enablePagination: false
maxItemsPerPage: 10
maxPaginationLinks: 10

Metro Manila (CNN Philippines, July 21) — An initial payment of P3.44 billion from tobacco company Mighty Corp. was paid to government, the Bureau of Internal Revenue (BIR) said.

A manager's check amounting to P3.44 billion, covering Mighty Corp.'s excise tax liabilities was issued by global tobacco company Japan Tobacco International (JTI) on July 20 and deposited with the SSS branch of the  Land Bank of the Philippines in Quezon City, the BIR said in a statement on Thursday.

Although government will not decline the payment, Finance Secretary Carlos Dominguez III said in the statement that receipt of the P3.44 billion did not mean that the government had accepted Mighty Corp.'s offer of a settlement, nor would it rule out any criminal charges the BIR may file against the company.

"We will accept the initial payment," Dominguez said.

Mighty Corp. said the P3.5 billion represents the outstanding excise taxes on its cigarette products which are now the subject of three tax cases pending before the Department of Justice.

Mighty Corp. has tax liabilities of P38 billion, and in a letter to the BIR on July 10, offered to settle P25 billion of it.

READ: Mighty Corp. offers to pay ₱25B to settle tax cases

The P25 billion is to be funded by means of an "interim loan" from JTI's Philippine unit, and the sale of Mighty Corp. including its affiliates to JTI for P45 billion, Barrientos said in his letter.

"The balance of P21.5 billion will be paid on or after the closing of the proposed deal with JTI," the BIR said. This amount covers the liabilities of the company and its shareholders including income tax from 2010 to 2016, and the tax period up to the closing of the proposed transaction with JTI, the BIR said.