PMFTC questions anew Mighty's tax payments

Posted at 08/27/2014 2:29 PM | Updated as of 08/27/2014 3:37 PM

MANILA, Philippines (UPDATE)  – Philip Morris Fortune Tobacco Inc. (PMFTC) again raised questions on the tax declarations of its rival Mighty Corporation, a Bulacan-based cigarette manufacturer.

In a statement, PMFTC said there is a “very large” gap between Mighty’s market share of 24 percent and its percentage of total tax paid withdrawals in the first half of the year.

Citing data from the Bureau of Internal Revenue, PMFTC said that P23.6 billion of the P28.18 billion collected in tobacco excise taxes in from January to June this year came from PMFTC factories, which is around 85 percent of the total excise collections in this period.

PMFTC added that in absolute tax paid volume for this period, of all cigarette packs that were produced and where tax was paid in January to June, more than 8 out of 10 of these packs were manufactured at PMFTC facilities.

However, PMFTC noted that Mighty has around 24 percent share of the total cigarette market, citing data from Nielsen.

“The apparent gap between the market share of Mighty Corporation and their likely percentage of total tax paid withdrawals in January-June 2014 is very large and raises a lot of question,” the firm said in a statement.

PMFTC has accused Mighty of evading taxes, which allows it to sell cigarettes at very low prices.

But Mighty has denied the allegations, dismissing it as part of a “smear campaign.”

PMFTC president Paul Riley said the tobacco firm is hopeful that “the soon to be introduced tax stamps will go a long way to addressing the issue of large scale leakages, and we will fully support the BIR in its implementation and rigorous enforcement.”

PMFTC also lauded the BIR for its significant increase in excise collections in the first half the year, but stressed that the release of these figures “puts into stark light the significant tobacco excise tax leakage that is continuing unabated in 2014.”

“This is denying billions of pesos in taxes that would have otherwise funded tobacco growing regions, and public health spending, as envisioned by the new Excise Tax Law,” the firm said.