A lawmaker on Thursday pressed the Philippine Competition Commission (PCC) to speed up its review of the acquisition of Japan Tobacco International Inc. (JTI) of tobacco firm Mighty Corp.
Rep. Luis Raymund F. Villafuerte Jr. of the Second District of Camarines Sur has appealed to the government’s antitrust regulator to hasten its approval of the acquisition by JTI of Mighty Corp. so as to enable the national government to get the rest of the P26.5 billion that it expects as full settlement of the latter’s tax liabilities, inclusive of the value-added tax (VAT) charges.
Villafuerte said PCC’s approval and the expected settlement from Mighty will aid the government in its efforts to consolidate available public funds to finance the reconstruction of war-torn Marawi City and disaster-hit areas in the country. The PCC is mandated to review mergers and acquisitions valued at P1 billion and above.
The lawmaker added the transfer of Mighty Corp.’s assets and distribution network to JTI, valued at P45 billion, will enable Mighty Corp. to make the full payment of its tax settlement offer to the government of P25 billion.
“A favorable and swift PCC decision on the sale will not only be advantageous to the government in terms of additional revenues, but would also lead to the shutdown of Mighty Corp.’s cigarette manufacturing and sales operations. The PCC would, indirectly, help the government clean up the private sector and beef up the government drive against tax dodgers,” Villafuerte said.
In July Mighty Corp., through JTI, had deposited P3.44 billion with the Land Bank of the Philippines representing the initial payment of its tax deficiencies, with the balance of P21.5 billion to be turned over to the government once the sale to JTI pushes through and is approved by the PCC.
According to PCC Chairman Arsenio M. Balisacan, the commission has already started the review of the deal, which could take up to 30 days, at the least. Should there be issues or additional concerns regarding the data submitted, the commission has 90 days to evaluate all the submissions.
Finance Secretary Carlos G. Dominguez III has said that another P5 billion in VAT on the JTI-Mighty transaction would also be collected by the government, bringing the total tax haul from the settlement to P30 billion.
Villafuerte added the Duterte administration’s strong stance against tax evasion and ongoing initiatives to improve tax administration should all the more convince senators to pass Package 1 of the Comprehensive Tax Reform Package that the House already approved on May 31.
During the President’s second State of the Nation Address, Duterte directed the Department of Finance and the Bureau of Internal Revenue to accept Mighty Corp.’s offer to avoid a protracted legal battle with the firm that could take years to resolve.