MANILA, Philippines - Philip Morris Fortune Tobacco Corp. (PMFTC) refused to back down from its assertion that main rival Mighty Corp. allegedly committed “systemic and endemic” fraudulent business practices and should therefore be made to pay its fair share of taxes.
PMFTC forged ahead with its offensive strategy by coming out with an advertisement in major newspapers denouncing Mighty’s illegal acts.
“Our intention is to highlight key facts and data uncovered in the government report that points to Mighty’s questionable business practices that not only harms legitimate tax paying companies like us but also significantly impacts key government programs as envisaged in the sin tax law,” PMFTC president Paul Riley said.
“Every company should pay their fair share of taxes for the development of the nation. This is the resounding message. We are hopeful that this would lead to more positive results,” he added.
Riley said the company feels strongly compelled to respond to Mighty’s misinformation on the government report.
Citing a report by the Senate Tax Study and Research Office (STSRO), PMFTC said Mighty used imported materials to make cigarettes for export but diverted them to the domestic market without paying duties and taxes.
The same report showed that Mighty undervalued the cost of its tobacco and filter imports to evade customs duties and import VAT (value-added tax).
PMFTC said the STRSRO report is a compilation of official data and facts collected from multiple agencies including the Bureau of Internal Revenue, National Tobacco Administration, and the Department of Trade and Industry.
Mighty, however, insisted that the report was based on an earlier Oxford Economic study which was commissioned by no less than PMFTC.
Riley reiterated its challenge to Mighty to stop skirting the issues and instead disprove the alleged acts of fraud uncovered in the report.
Nevertheless, Riley expressed hope that the integrated tax stamps system, which will require all local manufacturers to affix stamps on all packs of tobacco products, will curb tax evasion and fraud.
“We are in full support of the excise tax law and their goals. We are hopeful that the implementation of tax stamps on all packs as of December 1 will plug the significant leakages that have been identified. We will do everything we can to help the authorities identify any non-compliance from day one of the tax stamps application and will be relentless in pursuing non-compliance by any manufacturer,” Riley said.