Did Mighty Corp. Pay Their Taxes?

Local cigarette firm Mighty Corp. denied allegations over the issue of underpaid excise taxes for sales registered last year, claiming that they have paid at least P8.2 billion for the said taxes. The company likewise claimed to have paid P500 million for their 2012 taxes. With the allegations made by PMFTC, where’s their proof of the illegal activities they claim to have been committed by Mighty?

“Allegations that Mighty Corp. did not pay the correct taxes for 2013 are grossly inaccurate and downright ridiculous. Our critics had most likely misunderstood the data from the Bureau of Internal Revenue,” Oscar Barrientos, Mighty Corp. executive vice president, said. “The taxes we paid for the year 2013 reflects the jump in our market share and our fair share in the increased taxes on ‘sin’ products last year,” Barrientos added.

Barrientos also mentioned that tax payment was based on an average market share of 13.7 percent for the 12 months of last year. The company did not have a 20 percent market share for the entire year of 2013. “We closed the year with a 22.5 percent market share. We started 2013 with 3 percent,” Barrientos explained.

“We slowly but surely grew our market share over the past 12 months on the strength of our production efficiencies and a sound national sales distribution strategy,” he added. “We did not have a 20 percent year-round market share average, as what are our critics have erroneously and maliciously implied when they accused us of tax evasion.”

Mighty is being accused of evading the payment of P4 billion in excise taxes. And according to the data from BIR, it showed that total cigarette withdrawals in 2013 were about 100 billion sticks. “Critics charged that Mighty Corp. should have paid P12 billion instead of P8 billion since its 20 percent market share was supposedly equivalent to 20 billion sticks sold,” the bureau said.

“The first time we hit 20 percent market share was in December 2013. Our critics computed excise tax dues on 20 percent market share year-round. Of course there will be a discrepancy. They give new meaning to the term ‘creative accounting.’ The truth is, we paid the right taxes,” Barrientos closed.