P27-B tax case filed vs Mighty

10 May 2017:

The owner and executives of homegrown cigarette manufacturer Mighty Corp. are facing yet another tax evasion case in the Department of Justice (DOJ).

The Bureau of Internal Revenue (BIR) yesterday brought a criminal complaint against the owner and officials of the local cigarette manufacturer for allegedly avoiding the payment of P26.93 billion in excise taxes by using spurious tax stamps on its products.

This is the biggest of the 23 tax evasion cases filed by the BIR since President Duterte was sworn in nearly a year ago.

Sued were Mighty owner Alexander Wongchuking, also the company’s vice president and assistant corporate secretary; president Edilberto Adan, a retired Army general; executive vice president Oscar Barrientos, a former judge, and treasurer Ernesto Victa.

They were charged with violating Sections 263 and 265(c) of Republic Act No. 8424, or the National Internal Revenue Code of 1997, which prohibits the “possession of articles subject to excise tax without payment of the tax, and false, counterfeit, restored or altered stamps.”

The complaint was filed barely two months after the BIR lodged a similar criminal case in the DOJ against them over Mighty’s alleged failure to settle P9.6 billion in excise taxes.

In a statement, Internal Revenue Commissioner Caesar Dulay said the case stemmed from the raid conducted by officials of the Bureau of Customs and the BIR on Mighty’s two warehouses in San Ildefonso town, Bulacan province, on March 24.

After a thorough examination of the products, the tax bureau said it found out that the tax stamps attached on 536,000 cigarette packs that were contained in 1,072 master cases were counterfeit.

“The master cases containing the cigarettes with fake stamps were marked and seized. The stamps are fake since they did not contain one of the multilayered security features of a valid internal revenue stamp,” the BIR said.

As mandated by law, it said the tax stamps should have been attached on the cigarette packs at its factory in Barangay Tikay in Malolos City, also in Bulacan.

“Such failure to present the official delivery receipts showed that the cigarette packs in the subject warehouses did not come from the manufacturing plant in Barangay Tikay,” it said, adding that Mighty’s mere unexplained possession of the packs of cigarettes with fake internal revenue stamps was illegal and a violation of the tax code.

Source: https://business.inquirer.net/229190/p27-b-tax-case-filed-vs-mighty#ixzz4gksepe70