DOJ grants BIR motion to drop P37.9-B tax evasion raps vs Mighty

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(UPDATED – 5:50 p.m.) MANILA, Philippines — The Department of Justice (DOJ) has granted the motion of the Bureau of Internal Revenue to withdraw its complaint against Mighty Corp. following the BIR’s settlement agreement with the tobacco firm.

Three tax evasion complaints worth P39.7 billion were earlier filed by the BIR against Mighty but the bureau, through a Sept. 26 motion, dropped its charges against the company, more than two months after President Rodrigo Duterte told the Department of Finance (DOF) and the BIR to accept Mighty’s P25-billion tax settlement offer.

“In view of the fact that the NIRC (National Internal Revenue Code) recognizes the authority of the Commissioner of the Bureau of Internal Revenue to compromise, abate, and refund of credit taxes, and to compromise criminal violations except those already filed in court, or those involving fraud, and considering further, that the parties to the instant cases are not opposed to the prayer for withdrawal of the complaints, it behooves this Office to grant the motion if only to promote the greatest interest of the parties involved,” read a portion of the Oct. 2 DOJ resolution, released to media on Friday, Oct. 6.

The two-page joint resolution was signed by Senior Assistant State Prosecutor Sebastian F. Caponong Jr., and assistant state prosecutors Ma. Lourdes C. Uy and Mary Ann S. Parong. The decision was recommended for approval by Senior Deputy State Prosecutor Emelie Fe M. delos Santos and approved by Acting Prosecutor General Jorge G. Catalan Jr.

It was during his second State of the Nation Address last July 24 that Duterte announced that he had directed the DOF and the BIR to accept Mighty’s offer of P25 billion to pay its tax liabilities, which would be funded by the P45-billion sale of the firm’s assets and distribution network to Japan Tobacco International Philippines.

The President said the settlement “will be the biggest tax settlement on record” and “will produce a windfall for government, which is significant, since we face the unexpected costs of rebuilding Marawi and Ormoc.”

Marawi continues to be a battle zone between government forces and ISIS-linked Islamist extremists led by the Abu Sayyaf and Maute groups. Duterte has not yet lifted martial law in the Lanao del Sur capital and in the whole of Mindanao, which he imposed via Proclamation No. 216 last May 23.

Ormoc, Leyte was hit by a 6.5 magnitude tremor last July 6 that was followed by strong aftershocks.