Bureau of Internal Revenue (BIR) Commissioner Kim Henares earlier this month issued her findings favoring local cigarette manufacturing firm, Mighty Corporation or Mighty Corp over Philip Morris-Fortune Tobacco Corp. (PMFTC).
The BIR Commissioner ruled out the alleged cigarette smuggling activities filed against Mighty Corp by its rival company, saying that there exist no such wrongdoing made by the latter in the trade of tobacco in the Philippines.
Mighty Corporation, a Bulacan-based cigarette manufacturing company, became a subject of scrutiny when allegations of technical smuggling and tax evasion were filed against them by its competitor.
Commissioner Henares however said that Mighty Corp is just being aggressive in seizing market shares from big industry players since the enactment of the new excise tax regime.
Based on recent reports, Mighty Corp was able to gain 20% of the industry's market share from a mere 3% last year before the implementation of the new SIN Tax law. PMFTC on the otherhand went down 75% from a strong 92% before January 2013.
Mighty Corp, a Wongchuking family-owned and proud Filipino company has denied all the allegations of smuggling or any form of illegal business practices. Mighty Corp executives explained that the company managed to lower its operational cost as it does not pay royalty to foreign headquarters and has no foreign consultants.
They also stressed that imputing fraud against them was “not only unfair but highly libelous and damaging.”
Mighty Corp also added that the BIR and Customs authorities have been closely monitoring their operations, reporting and compliance. The company also assured the public that they are open to government’s plan to examine its books and challenges its competitors to do so as well to ensure proper compliance of all tobacco industry players with the new Sin Tax Law.
According to sources, PMFTC has already introduced its low-priced Marlboro cigarettes in Mindanao, selling it at P1 per stick.
Kabataan Representative Terry Ridon said, PMFTC cannot come to congress with unclean hands if it insists that Mighty Corp is resorting to illegal acts while they are also doing the same thing lately.
While we expect PMFTC to deny any illegality in its undertaking and claim that it can sell low-priced cigarettes without violating any law, that in a way is just saying that their allegations of illegal business practices against Mighty Corp is also not true.
The House Committee on Ways and Means is said to start its hearing on the tobacco issue sometime in the middle of next month.
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