Excise taxes from Mighty Corp. up by P4 billion monthly in Sep-Dec

Excise taxes collected from Mighty Corporation increased by P4 billion since it was acquired by Japan Tobacco Inc. (JTI), the Department of Finance (DOF) said Sunday.

According to the DOF, excise taxes collected from Mighty Corp. totaled P20.22 billion from September to December 2017, up 262 percent from the P5.57 billion from the same period in 2016.

"What stands out there is the Mighty-JTI improvement in collections as they represented [a] 262-percent improvement from September to December," Bureau of Internal Revenue (BIR) Commission Caesar Dulay was quoted as saying.

Mighty's contributions drove total excise tax collections up by 26.68 percent to P71.24 billion, compared with the P56.24 billion during the same period in 2016.

JTI in August 2017 announced its move to acquire Mighty Corp. for nearly $1 billion, which helped the company settle a tax evasion case.

Mighty in October paid the government nearly P40 billion to settle tax deficiencies as part of a compromise deal that allowed the company to walk away from criminal complaints filed before the Department of Justice.

The government expects the continued increase in the collection of excise taxes from tobacco products, with the passage of the Tax Reform for Acceleration and Inclusion (TRAIN) Act.

Under TRAIN, the unitary excise tax on cigarettes was hiked to P32.50 per pack from January 1 to June 30 this year, compared with the current P30 per pack.

This will then be increased to P35 from July 1, 2018 to December 31, 2019; P37.50 from January 1, 2020 to December 31, 2021; and P40 from January 1, 2022 to December 31, 2023.

Starting January 1, 2023, the specific tax rate on tobacco products will be hiked by 4 percent on an annual basis. — BM, GMA News