MANILA-- Officials of the controversial cigarette firm Mighty Corporation is facing another multi-billion tax evasion complaint filed by Bureau of Internal Revenue (BIR) before the Department of Justice (DOJ) on Monday.
The BIR filed anew tax evasion case involving PHP26.93 billion in alleged unpaid excise tax for unlawful possession of articles and for possessing false, counterfeit, restored or altered stamps in violations of the National Internal Revenue Code of 1997.
This is the biggest tax evasion case filed by the BIR so far in its "Run After Tax Evaders" program under the administration of President Rodrigo Duterte.
The new complaint in addition to the earlier PHP9.56 billion case filed against Mighty Corp. for allegedly using counterfeit stamps on their products to evade the payment of excise tax to the government.
The BIR named respondents were Mighty Corp official Alexander Wongchuking (assistant corporate secretary), former Armed Forces deputy chief-of-staff and retired Lt. Gen. Edilberto Adan, Might Corp.'s president; retired Judge Oscar Barrientos, company executive Vice President; and company treasurer Ernesto Victa in the second tax evasion case.
They were charged for violating Sections 263 and 265(c) of the 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 based on the operation conducted by the BIR's revenue officers of its Large Taxpayers Regulatory Division last March 24 on the cigarettes stored in Mighty Corp.'s warehouses at Barangay Matimbubong, San Ildefonso, Bulacan which resulted to the discovery of 536,000 cigarette packs in 1,072 master cases with fake stamps.
Internal revenue stamps affixed on the cigarette packs were tested using the Taggant reader, a BIR-registered equipment used to test the authenticity of stamps affixed on cigarette packs. Based on the 24-day validation activity conducted from March 27, 2017 to May 5, 2017, (some) 100 percent of the total stamps tested on 536,000 cigarette packs are fake. The master cases containing the said cigarettes with fake stamps were marked and seized, the BIR said.
The 536,000 cigarette packs were part of the 81,591,500 packs contained in 163,183 master cases found in the said warehouses.
The BIR explained that the stamps are considered fake since they did not contain one of the multi-layered security features of a valid internal revenue stamp and were not also affixed at the production plant of Mighty in Tikay, Malolos, Bulacan as required.
It added that no official delivery receipts for the San Ildefonso warehouses were presented by Mighty as per certification of revenue officers.
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 where such stamps should have been affixed to confirm that the proper taxes are paid before articles subject to excise tax are removed from the production plant," the complaint added.
It added that the San Ildefonso warehouses are also not registered with the BIR as certified by its Large Taxpayers Regulatory Division, thus, Mighty Corp. could not legally remove the said packs of cigarettes from their plant in Tikay, Malolos for delivery to the warehouses.
As a consequence of the criminal act of Mighty Corporation, together with its responsible corporate officers, of using fake internal revenue stamps, it evaded payment of the correct excise tax and is liable to pay an estimated aggregate deficiency excise tax liability in the total amount of PHP26.93 billion, inclusive of increments," the complaint added.
The first tax evasion case filed by BIR against Mighty Corp. last March involved the master cases of cigarettes worth PHP2.3 billion bearing fake tax stamps seized from the firm's warehouse in San Simon Industrial Park in Pampanga.
The DOJ panel of prosecutors led by Senior Assistant State Prosecutor Sebastian Caponong.has already started the preliminary investigation on the first case.
In the hearing last May 4, Wongchuking, Barrientos and Victa appeared before the panel and submitted their respective counter-affidavits denying the allegations of the BIR and seeking dismissal of the charges.
The hearing will continue on May 11 for the submission of counter-affidavit of Adan.
Mighty Corporation is a domestic corporation organized and existing under the laws of the Republic of the Philippines. It manufactures the following brands of cigarettes, among others: Mighty Menthol 100's (Hard Pack); Mighty Menthol 100's; Mighty Menthol 100's Green; Mighty Full Flavor King Size (Red); Marvel's Full Flavor King Size; Marvel's Menthol 100's; Marvel's Menthol 100's (Hard Pack); and Marvel's Menthol 100's (Green). Its only BIR-registered production plant is located at 55 McArthur Highway, Barrio (now Barangay) Tikay, Malolos, Bulacan.
Source: Philippines News Agency