Fortune belies DOF report on tax payments

Fortune Tobacco Corp. said yesterday it has always complied with its tax obligations in accordance with the law and should Congress pass new tax measures, the company would fully comply with it.

Reacting to the claim of the Department of Finance, Salvador M. Mison, president of Basic Holdings Corp., the holding company of Fortune Tobacco, said the published reports tend to project that the firm owes the government P27 billion in taxes.

"The authority to enact tax measures rests on Congress," said Mison, a former Customs commissioner. "The finance department study was premised on the assumption that had appropriate fiscal measures been in place, the government could have collected P27 billion from Fortune Tobacco, but again, this is merely speculative."

On Sept. 12, Finance Assistant Secretary Ma. Teresa S. Habitan sent a memorandum to Finance Secretary Jose Isidro N. Camacho, Undersecretary Grace Pulido Tan and BIR Commissioner Guillermo Parayno Jr. showing that "the results of the estimation indicate that had Congress reclassified old cigarette brands in any of the years from 1999 to 2002, the government could have realized the additional revenues.

To correct this, Iloilo Rep. Rolex T. Suplico and Negros Occidental Rep. Julio A. Ledesma IV had filed House Bills 4765 and 5957, which seek to introduce a system of automatic indexation (adjustment of taxes based on the consumer price index) for sin taxes, and the periodic reclassification of products subject to excise tax.

Mison reiterated that under the Constitution, all tax measures should emanate from the House of Representatives and that Fortune Tobacco, owned by businessman Lucio C. Tan, has been paying religiously its taxes to the government.

"We are operating on the principle of trust and service to the nation," Mison emphasized. "Fortune Tobacco was established based on that principle."

Fortune’s cigarette brands covered by the study are: Salem Menthol 100s, Winston Filter Kings, Winston Light, Camel Filter Kings, Salem Menthol Kings, Hope Luxury Menthol Kings, Champion Menthol 100s, Boss Kings, Champion Light, Champion Menthol Kings, Fortune International Menthol Kings and Liberty Menthol 100.