Two House of Representatives committees were asked to conduct a congressional investigation, in aid of legislation, into the alleged tax evasion activities of a local cigarette manufacturer that deprived government of over P1 billion in taxes.
Navotas City Rep. Federico Sandoval II filed House Resolution No. 841 to determine the truth behind the alleged illegal operations of Mighty Corp., one of the country’s leading cigarette manufacturers, which were recently exposed in the media.
Sandoval, vice chairman of the House Committee on Appropriations, said the House inquiry will also try to determine how much government actually lost as a result of the tax evasion operations using fake tax stamps.
The administration lawmaker noted a wide discrepancy in the figures as experts claimed that government may have lost from R1 to 15 billion due to the use of counterfeit tax stamps.
“At an excise tax of P30 a pack, the government’s foregone revenues from Mighty Cigarette packs bearing counterfeit tax stamps would reach more than a billion pesos of unpaid excise taxes,” noted Sandoval.
He said the House will have to determine the veracity of the accusations to be able to pass legislative measures that would impose stricter tax regulations aimed at preventing similar incidents from happening again in the future.
“We might look into the possibility of imposing stiffer penalties by increasing the prison term and fines against guilty parties,” Sandoval said.
Mighty officials have come under fire after raids conducted by the Bureau of Customs and the Bureau of Internal Revenue in warehouses of the firm yielded millions of packs of cigarettes bearing counterfeit tax stamps.
During an inspection conducted by the BIR in a Metro Mandaue Mall in the Visayas, fake tax stamps were found in Mighty products.
“The joint raids of the two bureaus in March resulted in the confiscation of 73,244 master cases or 36.622 million packs of cigarettes with fake tax stamps,” said Sandoval. (Ben R. Rosario)