• May 23, 2024

Tax deal edges closer

 Tax deal edges closer

The government of the Philippines has said that it will accept an initial payment of about P3.5 billion toward the tax liabilities of local cigarette maker Mighty Corp, according to a story in The Manila Times.

The Times story indicated, however, that the Department of Finance (DOF) had ‘stressed’ that such acceptance did not yet mean it was agreeing to the company’s total settlement offer of P25 billion.

“We will accept the initial payment,” Finance Secretary Carlos Dominguez III said in a statement released on Thursday.

The Finance department said it had been informed that a check for P3.44 billion would be issued by JT International Philippines (JTI).

Last week JTI confirmed it was in talks with Mighty on the sale of the local cigarette maker’s manufacturing and distribution business and assets to Japan Tobacco.

Mighty had earlier said that its tax settlement offer would be funded by means of an ‘interim loan’ from JTI and the sale by Mighty and its affiliates of its manufacturing and distribution business and assets, along with the intellectual property rights associated with these assets, ‘including those owned by the company, Wong Chu King Holdings Inc, and other affiliates, to JTI or any of its affiliates for a total purchase price of P45 billion exclusive of VAT’.

The Finance department said Mighty would pay the balance of P21.5 billion on or after the closing of its proposed deal with JTI.

Meanwhile, Dominguez said that even if the government accepted Mighty’s settlement offer, this would not preclude any criminal charges that the Bureau of Internal Revenue might file against the company in connection with its tax-related issues.